Also known as: prior dealing · prior deal · course of dealing · course of dealings · previous dealings
Written by attorneys · grounded in primary & secondary sources — see below
A sequence of previous conduct between parties to an agreement that establishes a common basis for interpreting their expressions and other conduct.
Prism Analytics ordered monthly software updates from Pacific Bank under a services agreement silent on delivery windows. Over the prior eighteen months the bank had always shipped updates on the first business day of each month and Prism had accepted them without objection. When a later shipment arrived on the fifteenth, the court treated the established sequence of conduct as supplying the understanding that first-of-month delivery was required.
Pavel Petrov bought industrial drills from Pioneer Energy under a contract containing no express warranty disclaimer. For three prior purchases the seller had delivered used equipment plainly marked "as is" and Petrov had raised no complaint. The court held that the repeated acceptance of marked goods modified any implied warranty of merchantability that would otherwise have arisen.
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Pierce Patterson contracted with Pinnacle Holdings for weekly lawn maintenance at a fixed per-visit price. The writing stated that no price adjustment would occur without a signed amendment. Although the parties had twice before allowed oral price increases after unexpected supply costs, the court enforced the written clause and refused to give the earlier conduct controlling weight.
Portia Price purchased office furniture from Prism Analytics under a new written order that omitted any credit term. For the preceding four purchases the seller had extended thirty-day credit without objection from Price. The court regarded that repeated conduct as creating the shared basis that thirty-day credit would again apply.
Preston Pratt bought asphalt from a supplier under a long-term requirements contract silent on price escalation. The supplier had customarily absorbed fuel surcharges in earlier dealings with Pratt. When the supplier later passed on surcharges, the court examined whether the prior sequence of conduct between these parties qualified the written price term.
Pamela Phillips bought household goods from a furniture dealer under successive installment contracts. Each prior writing contained a cross-collateral clause that treated all items as security for any unpaid balance. When Phillips defaulted on the latest purchase, the court looked to the repeated inclusion of the clause in earlier transactions to determine the scope of the security interest.
A course of dealing arises from the parties' own prior transactions with each other. A usage of trade arises from practices common in the relevant vocation or trade. The Restatement gives greater interpretive weight to course of dealing than to usage of trade.
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Yes. An implied warranty may be excluded or modified by course of dealing even without an express disclaimer in the current contract. The repeated acceptance of goods sold "as is" in earlier transactions can establish the modification.
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Express terms control. The Restatement assigns greater weight to express language than to any course of dealing or usage of trade, so a clear written provision overrides an inconsistent pattern from prior transactions.
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No. A sequence of previous conduct between the parties establishes a course of dealing when it fairly creates a common basis of understanding, even if the conduct occurred under earlier separate agreements.
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…by the same purchaser, and each new item purchased automatically became subject to a security interest arising out of the previous dealings. On May 12, 1962, appellant Thorne purchased an item described as a Daveno, three tables, and two lamps, having total stated value of $391.10. Shortly thereafter, he defaulted on his…