Trade Usage, Course of Dealing, and Course of Performance

Question 1

What is usage of trade?

Answer 1

any practice or method of dealing having such regularity of observance in a place or trade as to justify an expectation that it will be observed with respect to the transaction in question [what all members of the trade do]

Question 2

What is course of dealing?

Answer 2

a pattern of conduct concerning previous transactions between the parties that is fairly to be regarded as establishing a common basis of understanding for interpreting their subsequent expressions and other conduct [what the parties did in their PREVIOUS contracts].

Question 3

What is course of performance?

Answer 3

present when a particular contract involves repeated occasions for performance by a party and the other party, with knowledge of the nature of the performance and opportunity for objection to it, accepts the performance or acquiesces in it without objection [how the parties have acted under their CURRENT contract].

Question 4

What are admissible uses to admit extrinsic evidence in a contract?

Answer 4

To fill in gaps (supplement terms) and resolve ambiguities

Question 5

What are inadmissible uses to admit extrinsic evidence in a contract?

Answer 5

To contradict express terms of a K

Question 6

What is the trade usage triad?

Answer 6

(1) usage of trade
(2) course of dealing
(3) course of performance

Question 7

What is the priority if there’s a conflict in the trade usage triad?

Answer 7

(1) Course of performance prevails over course of dealing and usage of trade
(2) Course of dealing prevails over usage of trade