Flow-Down Clauses and Incorporation by Reference in Construction Contracts

Originally published in Building & Bonding: The Construction Group Newsletter

Flow-down clauses—also referred to as pass-through or conduit clauses—are common in construction contracts.¹ Such provisions state that the subcontractor is bound to the contractor in the same fashion as the contractor is bound to the owner in the prime contract. Flow-down provisions help to ensure that the subcontractor's obligations to the contractor mirror the contractor's obligations to the owner.

Most flow-down clauses fall into one of two categories: clauses limited to the scope of work or more-general clauses encompassing non-scope-of-work related obligations, such as payment or dispute resolution. Typically, a clause that is limited to scope-of-work issues will identify the work to be done by the subcontractor and state that, with respect to the designated work, the subcontractor is obligated to the prime contractor in the same manner and to the same extent that the prime