“Incorporation by reference” is where a contract includes other a separate, additional document by naming that additional document rather than including the full text or full version of the additional document. The additional document is “incorporated” (included) into the main contract by being named (“referenced”) in the main document. It is often used in contracts to include things such as additional terms and conditions or policies.

Perhaps the best known forms of incorporation by reference are “Standard Charge Terms” included in mortgages. While a mortgage document itself may be only a page or two long, the Standard Charge Terms [SCT] can be 15,000 words (about 30 pages) long. (If you are curious, every Ontario STC can be found online via Onland.)

Incorporation by Reference is often done where all of the necessary “nuts and bolts” of a contractual relationship are too long for the main document itself, or where many different documents need the same common terms and requirements included.

Incorporation by reference promotes efficiency, reduces drafting errors and inconsistencies, avoids unnecessary repetition of lengthy provisions, and ensures uniform application of those terms across related agreements while still giving them full contractual force.