Definitions and incorporation by reference: Overview, definition, and example
What is definitions and incorporation by reference?
Definitions and incorporation by reference is a contract section that does two things: it explains specific meanings for important terms used in the contract (“definitions”) and brings in outside documents or terms by referring to them directly (“incorporation by reference”). Instead of repeating the full content of another document, the contract simply refers to it and treats it as part of the agreement.
Why is definitions and incorporation by reference important?
This section keeps contracts clear and concise while still including all necessary details. Definitions prevent confusion about what certain terms mean, and incorporation by reference allows the contract to rely on additional materials—like policies, schedules, or technical specs—without including them in full. This saves space and makes contracts easier to manage, but it also means both parties need to know exactly what’s being incorporated.
Understanding definitions and incorporation by reference through an example
Here’s how definitions and incorporation by reference might show up in a real contract. A software agreement defines “Services” to mean access to the company’s cloud platform, customer support, and data storage. Later in the contract, it says: “Customer shall comply with the Acceptable Use Policy, which is incorporated by reference into this agreement.”
This means the Acceptable Use Policy isn’t written out in the contract, but it still applies in full—just as if it had been copied and pasted into the document. If the customer violates the policy, it could still be considered a breach of contract.
Example of a definitions and incorporation by reference clause
Here’s how an example definitions and incorporation by reference clause may look like in a contract:
Capitalized terms used in this agreement have the meanings set forth in this section or elsewhere in the agreement. The following documents are incorporated by reference and form part of this agreement as if fully set forth herein: the Privacy Policy, the Acceptable Use Policy, and any applicable Order Forms executed by the parties.
Conclusion
This section lays the groundwork for how a contract should be read and what materials it includes. By clearly defining terms and incorporating related documents, it helps keep the agreement organized while still covering all the necessary details. Always review what’s being referenced—you’re agreeing to it, even if it’s not written out in full.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.