- One document inserted partially into another is incorporation by reference. This reference usually describes the incorporated text to the extent that allows the reader to understand the reference as if it were completely reproduced in the new document. In other words, incorporation by reference takes all or part of another text and inserts it into another without actually reproducing word for word. For example, an employment contract can describe a previously executed noncompete agreement and state that the noncompete agreement should be considered as completely part of the new contract, thus making the noncompete agreement legally part of the contract terms.
- Incorporation by reference prevents unnecessary redundancy and employs an established law, rule or other sort of text in another legal context. Court pleadings, contracts, trust formation, and federal regulations or statutes frequently use the practice. In many of these instances, a copy of the referenced document is attached at the end of the incorporating document.
- Title 1 of the Code of Federal Regulations, Chapter II, Part 51 governs the use of incorporation by reference in the Federal Register, where executive orders and the rules of executive agencies are published. The words "incorporated by reference" must appear in an incorporating document, along with the title, date, edition, author, publisher and identification number (if applicable) of the referenced document; a statement to the effect that the referenced publication receives full effect in the incorporating document; and where and how to obtain or examine copies of the referenced document.
- A potential problem of incorporation by reference is that the incorporated document may change after its use in the incorporated document, which could create unintended consequences. For this reason, the description of the incorporated document should usually include a date-specific reference to eliminate ambiguity about which version of the incorporated document is in effect. If the referenced document is not attached or adequately described, the possibility of a fraudulent substitution also exists.
- One area of law where incorporation by reference is particularly controversial is with wills. A will represents the words and intent of the person making the will (called the testator). So incorporating an outside document not written by the testator is considered questionable. Most states have precise requirements about the signatures and witnesses to a will. If the an incorporated document is not physically present at the execution of the will, its relevance and enforceability can be challenged. Some states require the testator's signature after the attached copy of the incorporated document, without the signature, the incorporated/referenced document can be rejected as part of the will.