One Beacon Ins. Co. v. CROWLEY MARINE SERVICES
648 F.3d 258 | Court of Appeals for the Fifth Circuit | 2011
What This Case Means for Subcontractors
Crowley Marine hired Tubal-Cain to repair a barge. Tubal-Cain hired Rio Marine as a subcontractor. A Rio Marine worker was injured during the work. The court ruled that Tubal-Cain was bound by insurance and indemnification requirements that were listed on Crowley's website and referenced in the purchase order, even though Tubal-Cain never received a hard copy and didn't actually read them. The court enforced these obligations against Tubal-Cain. This matters because it means you can be legally bound to terms you never physically received or reviewed if they're incorporated by reference into your contract.
Key Takeaways
- •Always ask for and review the complete contract terms before signing, including any documents referenced or incorporated by reference. Don't assume you'll get them later.
- •Check the customer's website and any links in the purchase order for hidden contract terms. Courts will enforce these even if you didn't read them.
- •Indemnification and insurance requirements can flow down to you as a subcontractor. Make sure you understand your obligations to defend and insure the project owner before you start work.
Terms incorporated by reference are valid where parties had knowledge of and assented to them.
Frequently Asked Question
Can I be bound by contract terms I never received in writing or read?
Yes. If the purchase order references terms on a website or in another document, courts will enforce those terms against you even if you didn't receive a hard copy or actually read them. The court assumes you had the opportunity to access and review them. Always request complete written terms upfront and verify you have everything before starting work.
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