The 10th Court of Appeals reversed a trial court order denying the motion to compel arbitration in a breach of contract dispute involving application of the incorporation by reference doctrine.
Mitchell Constuction Company, Inc. v. Superior Commercial Concrete, LLC (No. 10-24-00350-CV; October 9, 2025) arose from a construction dispute. Mitchell contracted with Messer, LLC to serve as general contractor for a commercial construction project, then put the project out for bids. Mitchell accepted Superior’s bid for the concrete work, and despite an exchange of drafts and redlined proposals, the parties signed no formal written subcontract. Work commenced nonetheless. In January 2024 Superior filed suit against Mitchell and Messer alleging that they “failed to refuse and compensate” Superior for its services. Superior asserted claims for breach of contract, breach of fiduciary duty, conversion, and unjust enrichment, as well as quantum meruit and foreclosure of statutory and constitutional liens.
The following month, Mitchell invoked the arbitration clause of the subcontract and filed a motion to compel arbitration. Superior responded that the parties had no contract and that Superior had failed to establish the existence of a valid arbitration agreement. The trial court sided with Superior and denied the motion to compel. Mitchell moved for reconsideration, asserting that because Superior sought benefits under the contract, it was estopped from avoiding arbitration. Mitchell argued further that Superior’s signing of several change orders referring to the unsigned subcontract resulted in the incorporation by reference of all of the subcontract’s terms. It offered into evidence eight charge orders, seven invoices, and eight accompanying bids from Superior. Still the trial court denied reconsideration. Mitchell sought interlocutory relief.
In an opinion by Chief Justice Johnson, the court of appeals reversed and remanded. Mitchell argued that the change orders and other documents submitted by Superior incorporated by reference the unsigned subcontract (the “incorporation by reference doctrine”). Under the doctrine, a later agreement “needs only manifest an intent to include the extrinsic terms, documents, or agreements (citation omitted). Any description or reference to other documents places a duty to inquire on the party to an agreement,” requiring a party “to follow up from one instrument to another, until the party obtains complete knowledge of all matters referenced” (citation omitted). Even so, the contract must reference the incorporated document by name because “contract law obligated contracting parties to read what they sign to protect themselves, ‘and [they] are presumed, as a matter of law, to know the contract’s terms” (citations omitted).
The court first determined that Mitchell and Superior had a valid contract based on Superior’s acceptance of Mitchell’s change orders without interlineations or revisions (which would have constituted counteroffers). The change orders tracked Superior’s bid and reference the proposed written subcontract, so the parties were “well aware of their terms.” They also “communicated the essential terms—the service costs, the service to be provided, and mutual obligations.” Superior’s representative accepted the additional terms in the change orders by signing them, thus forming a binding contract.
The Court then considered if the charge orders had been incorporated into the unsigned subcontract. In a similar case, LDF Const., Inc. v. Tex. Friends of Chabad Lubavitch, Inc., 459 S.W.3d 720 (Tex. App.—Houston [14thDist.] 2015, no pet.), LDF and the plaintiff entered a contract that referenced a separate contract with an arbitration provision. Neither party signed the reference document, but the court incorporated it and applied the arbitration provision. As described above, Superior had knowledge of the subcontract and its terms and agreed to charge orders that expressly incorporated it. Superior argued that the two drafts of the unsigned contract created an evidentiary issue. Since both drafts contained the same arbitration provision, the court concluded, the issue of which draft applied did not arise. Reversed and remanded.
TCJL Intern Satchel Williams researched and prepared the first draft of this article.
