Also known as: U.C.C. § 1-303 · Uniform Commercial Code § 1-303 · course of performance · course of dealing · usage of trade
Written by attorneys · grounded in primary & secondary sources — see below
A statutory rule under which course of performance accepted or acquiesced in without objection receives great weight in interpreting an agreement. Manifestations of intention are construed as consistent with any relevant course of performance, course of dealing, or usage of trade whenever reasonable. Express terms control over course of performance, which in turn controls over course of dealing and usage of trade, when consistency is unreasonable.
Upstream Petroleum delivers crude oil monthly to United Bank under a long-term supply contract. United Bank accepts each shipment despite minor variations in sulfur content and never objects. When a later dispute arises over quality standards, the repeated acceptances establish the parties' practical understanding of acceptable performance.
Ulysses Maritime agrees to transport containers for Utopia Pharmaceuticals on a recurring basis. Both parties schedule and accept deliveries within a four-hour window for six months. When a timing dispute surfaces, the pattern of mutual conduct supplies the operative benchmark for reasonable performance.
Select any source to read its text and confirm it supports the definition.
Umar Usmani contracts with Upstream Petroleum for fuel at a fixed posted terminal price. Industry practice allows surcharges for delivery costs, and Upstream begins invoicing them. Umar pays several invoices without protest, yet the written price clause still governs because express terms prevail when inconsistency cannot be reconciled.
Wisconsin Knife Works orders custom metal parts from National Metal Crafters under a requirements contract. National delivers late on multiple occasions. Wisconsin accepts the parts without reservation for months before claiming breach, so the course of performance undercuts any later insistence on strict timeliness.
Eastern Air Lines purchases jet fuel from Gulf Oil under a requirements contract. Both parties track purchases against historical volumes for years without objection. When market conditions shift, the established purchase pattern supplies the benchmark for determining whether later demands are unreasonably disproportionate.
Transatlantic Financing agrees to carry cargo for the United States on a stated route. Suez Canal closure forces a longer voyage. The parties' prior dealings and industry usage of alternative routes determine whether the deviation was commercially reasonable under the circumstances.
Express terms receive greater weight than course of performance. When the two cannot reasonably be reconciled, the express terms control. Course of performance is relevant only to interpret or supplement the agreement when consistency is possible.
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Repeated occasions for performance with knowledge and opportunity to object, when accepted without protest, receive great weight in determining the meaning of the agreement. The conduct supplies objective evidence of the parties' practical understanding.
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Yes. Unless otherwise agreed, a usage of trade in the vocation or trade in which the parties are engaged, or of which they know or have reason to know, gives meaning to or supplements or qualifies their agreement. The same principle applies to course of dealing.
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Express terms control over course of performance, course of dealing, and usage of trade. Course of performance controls over course of dealing and usage of trade. Course of dealing controls over usage of trade. The hierarchy applies only when reasonable consistency cannot be achieved.
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…agreement, the normal or usual facilities enter into the agreement either through the circumstances, usage of trade or prior course of dealing.” So long as this sort of assumption does not necessarily result in construction of a condition of performance, it is idle to argue over whether the usual and customary route is an “implied…