General contractors appreciate the importance of understanding the provisions in their own contracts. However, understanding the provisions contained in other parties’ contracts on the same Project can be just as important at times.

For example, in some circumstances, a person or company that did not sign a contract with an arbitration clause may still be subject to that clause if certain conditions are met. This can happen under a legal principle known as “direct benefits estoppel.”[1] Under this theory, a non-party to a contract can still be held subject to certain terms of the contract, including arbitration provisions. As a general matter, this can occur when the non-signing party acts as if it was a party to that agreement—for example, by trying to direct work under that agreement—and does so directly for its own benefit. In other words, the non-signing party behaves as if it is actually a party to the contract in an effort to directly benefit from the terms of that contract.