Court addresses extent of incorporation by reference in construction design contract.

The case in Martins Ferry City School Dist. Bd. of Edn. v. Colaianni Construction, Inc., 2023-Ohio-2285 (7^th Dist. 2023) arose from school construction.  The projects participated in Ohio’s Classroom Facilities Assistance Program, which resulted in the design contract including a reference to the Ohio School Design Manual published by the Ohio Facilities Construction Commission.  Specifically, the design architect’s contract stated that the architect, “shall endeavor to ensure that the plans, specifications, and materials proposed for use in the [school project] comply with the standards established by the Ohio School Design Manual and Commission policies with the exception of any variance approved by the Commission….”  The architect’s design contract was the only contract that referenced the Ohio School Design Manual.

After the projects’ substantial completion, water leaks began, which caused interior damage.  It was alleged that the roof systems were defectively designed as well as defectively installed, such as issues relating to ventilation, fastening, and flashing.

The school board alleged the architect was subject to an express warranty based on a provision in the Ohio School Design Manual.

On the applicable law, the court found that Ohio contract law recognizes the doctrine of incorporation by reference.  When a document is incorporated into a contract by reference, that document becomes a part of the contract.  However, it further found that mere reference to a document is insufficient to incorporate it.  Rather, the contract language must clearly demonstrate that the parties intended to incorporate all or part of the referenced document.  This included whether the extrinsic material was explicitly, or at least precisely, identified in the contract and whether the contract clearly communicated that the purpose of the reference was to incorporate the referenced material into the contract.

The court found that architect’s design contract provision did not constitute an integration of every provision of the Ohio School Design Manual into the contract.  Further, the term “endeavor” spoke of an effort or goal, rather than a promise or a result.  Therefore, it had not been a clear communication of a purpose to incorporate the referenced material into the contract.  Even though the Ohio School Design Manual had been mentioned in the architect’s contract, the Ohio School Design Manual had not been incorporated by reference.

Nick Schwandner is a construction lawyer based in Cincinnati, Ohio.  He represents general contractors and subcontractors in litigation against project owners, other contractors, and sureties.