What happens when an obsolete standard is specified and incorporated by reference into the Agreement?
You can incorporate any document by reference into your agreement. It doesn’t need to be active or current. For example, if you had a previous document with a supplier that you had let expire and you needed to do business with the supplier again, you could incorporate the entire terms of the prior agreement by reference and then add or deleted terms needed for the new agreement.
What about standards? If the standard was incorporated by reference into the agreement you would be required to meet it even if the standard was defunct. There would be exceptions to that if country law required that the current standards must be complied with. If the contractor was required by law to meet the new standard, the responsibility for any cost difference would belong to the buyer. The buyer could argue that the contractor either knew or should have known that the new standards were required as a matter of complying with the law and as a result the price should have included the cost for complying with the new standard. In this case the court would look at the entire agreement. If there was language in the agreement that required the supplier to comply with applicable law and the new standard was mandated by law, the buyer might prevail.
If the agreement made no mention of the requirement to comply with that applicable country’s law, the supplier might prevail. That is because in the event of an inconsistency, it will be construed against the party that drafted the document.
If the document that referred to obsolete standards was prepared by a third party such as an architect, engineer or consultant. the owner could potentially file a claim against them. That would be considered an “error or omission.” A claim for errors and omissions could include damages sustained and any cost of re-work to correct the error or omission. It would not include
any areas where the owner received additional value as a result of the new standard. The principles of equity would prevent the owner from financially benefitting from the error or omission.
