{"id":906149,"date":"2026-09-23T14:54:59","date_gmt":"2026-09-23T20:54:59","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=906149"},"modified":"2026-09-23T14:55:06","modified_gmt":"2026-09-23T20:55:06","slug":"construction-contract-reference-a-proposal-may-not-incorporate-its-terms","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/construction-contract-reference-a-proposal-may-not-incorporate-its-terms\/","title":{"rendered":"Not So Cleaver: Why Merely Referencing a Proposal May Not Incorporate Its Terms"},"content":{"rendered":"\n<p>W. Hunter Webb and John Mark Goodman | <a href=\"https:\/\/www.buildsmartbradley.com\/2026\/09\/not-so-cleaver-why-merely-referencing-a-proposal-may-not-incorporate-its-terms\/?utm_source=Bradley+Arant+Boult+Cummings+LLP+-+BuildSmart&amp;utm_campaign=9fd123f38b-RSS_EMAIL_CAMPAIGN&amp;utm_medium=email&amp;utm_term=0_b504caf31b-9fd123f38b-78863422\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">BuildSmart<\/a><\/p>\n\n\n\n<p id=\"in-construction-contracts-proposals-drawings-st\">In construction contracts, proposals, drawings, studies, etc. are often incorporated by <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/design-services-contract-incorporation-by-reference\/\">reference<\/a>. A Nebraska federal court recently addressed what language is sufficient to accomplish such incorporation. In\u00a0<em>Cleaver Brooks Co. v. B&amp;K Mechanical Contractors, LLC<\/em>, No. 4:23-CV-3243, 2026 WL 2254434 (D. Neb. Aug. 5, 2026), the court rejected an argument that a subcontract\u2019s reference to a supplier\u2019s proposal pulled the proposal\u2019s payment terms into the deal.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"background\">Background<\/h4>\n\n\n\n<p id=\"cleaver-brooks-a-boiler-manufacturer-submitted-a\">Cleaver Brooks, a boiler manufacturer, submitted a proposal to Grunwald, the mechanical subcontractor on a VA hospital project, for a custom boiler. The proposal included a milestone-based payment schedule. During negotiations over the resulting subcontract agreement, Cleaver Brooks asked Grunwald to reference the proposal in the subcontract and later asked Grunwald to add the phrase \u201cincluding applicable commercial terms\u201d to that reference. Grunwald agreed to the added language, and the parties executed the subcontract agreement.&nbsp;<\/p>\n\n\n\n<p id=\"the-executed-subcontract-agreement-required-cleave\">The executed subcontract agreement required Cleaver Brooks \u201cto perform certain labor and\/or furnish certain material for the erection and completion of Department of Veteran Affairs 4101 Woolworth Ave, Omaha NE 68105; Correct Mechanical Deficiencies Project 636-19-301&nbsp;<strong><em>Purchase of D-Style Boiler 07310929-Proposal -Rev-0 Dated October 4, 2021 including applicable commercial terms<\/em><\/strong>&nbsp;as per plans and specifications prepared by N.A., Architect.\u201d<\/p>\n\n\n\n<p id=\"when-grunwald-later-refused-to-make-the-milestone\">When Grunwald later refused to make the milestone payments Cleaver Brooks expected, Cleaver Brooks argued that the proposal, including its milestone payment schedule, had been incorporated into the subcontract wholesale, both because the proposal was referenced and because the reference specifically added \u201cincluding applicable commercial terms.\u201d<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"the-court%e2%80%99s-analysis\">The Court\u2019s Analysis<\/h4>\n\n\n\n<p id=\"the-court-already-had-found-at-the-pleading-stage\">The court already had found, at the pleading stage, that the subcontract agreement wasn\u2019t a fully integrated expression of the parties\u2019 deal, since it left out material terms found elsewhere. That meant the subcontract necessarily pulled in&nbsp;<em>some<\/em>&nbsp;proposal terms. But which ones was a different question, and it was one the court answered narrowly.<\/p>\n\n\n\n<p id=\"the-court-held-that-merely-citing-the-proposal-in\">The court held that merely citing the proposal in the subcontract wasn\u2019t enough, standing alone, to incorporate the proposal in its entirety without more precise incorporating language. Cleaver Brooks tried to supply that precision with the phrase \u201cincluding applicable commercial terms,\u201d but the court found those words did the opposite of what Cleaver Brooks needed \u2014 they simply raised the question of which terms actually qualified as \u201capplicable,\u201d rather than answering it.<\/p>\n\n\n\n<p id=\"the-court-then-turned-to-the-parties%e2%80%99-own-communic\">The court then turned to the parties\u2019 own communications, which showed the milestone payment schedule was being negotiated separately and hadn\u2019t been resolved when the \u201ccommercial terms\u201d language was added. On the same day Grunwald agreed to that phrase, Cleaver Brooks\u2019 own project manager asked whether Grunwald would accept the milestone payments, which only makes sense if he didn\u2019t think the issue was already settled. The court treated that internal inconsistency as strong evidence that the reference to the proposal, even as modified, didn\u2019t reach the milestone payment schedule.<\/p>\n\n\n\n<p id=\"cleaver-brooks-didn%e2%80%99t-walk-away-empty-handed-the\">Cleaver Brooks didn\u2019t walk away empty handed. The parties later signed a memorandum of understanding that expressly committed Grunwald to a new payment schedule, and the court found that document created binding obligations Grunwald breached. A full copy of the court\u2019s decision is\u00a0<a href=\"https:\/\/www.buildsmartbradley.com\/wp-content\/uploads\/sites\/34\/2026\/09\/Cleaver-Brooks.pdf\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">available here<\/a>.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"the-takeaway\">The Takeaway<\/h4>\n\n\n\n<p id=\"the-nebraska-court-determined-that-referencing-a-s\">The Nebraska court determined that referencing a separate document in a contract may not be enough to pull in that document\u2019s terms. Contract drafting is not always perfect; if you want to avoid a court inferring the intent of the parties, best practice is to make incorporation of specific documents and terms clear by, for example, listing the document as a separate exhibit that is made part of the agreement or stating plainly that the document or specific terms are incorporated by reference and binding on the parties.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes &#8211; please call Advise &amp; Consult, Inc. at 801.641.8304, or email <a href=\"mailto:experts@adviseandconsult.net\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">experts@adviseandconsult.net<\/a><\/strong>.<\/p>\n\n\n\n<p>Republished with permission. The article, \u201cNot So Cleaver: Why Merely Referencing a Proposal May Not Incorporate Its Terms\u201d was originally published on BuildSmart by Bradley Arant Boult Cummings LLP. Copyright 2026.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>W. Hunter Webb and John Mark Goodman | BuildSmart In construction contracts, proposals, drawings, studies, etc. are often incorporated by reference. A Nebraska federal court recently addressed what language is sufficient to accomplish such incorporation. In\u00a0Cleaver Brooks Co. v. B&amp;K Mechanical Contractors, LLC, No. 4:23-CV-3243, 2026 WL 2254434 (D. Neb. Aug. 5, 2026), the court&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/construction-contract-reference-a-proposal-may-not-incorporate-its-terms\/\">Continue reading <span class=\"screen-reader-text\">Not So Cleaver: Why Merely Referencing a Proposal May Not Incorporate Its Terms<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[9],"tags":[9895,224,12368],"class_list":["post-906149","post","type-post","status-publish","format-standard","hentry","category-construction-contracts","tag-advise-consult","tag-construction-contract","tag-reference","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Not So Cleaver: Why Merely Referencing a Proposal May Not Incorporate Its Terms - Advise &amp; 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