Article 2 — Sales · Section 2-208
This section addresses the use of course of performance, course of dealing, and usage of trade in interpreting agreements and contract terms under Article 2 of the UCC.
Source: U.C.C. § 2-208
A contract for sale of goods may be explained or supplemented by: (1) a course of performance accepted or acquiesced in by both parties, (2) a course of dealing between the parties, and (3) usage of trade.
UCC § 2-208 provides guidance on how to interpret contracts for the sale of goods by considering the behaviors and practices of the parties involved. It allows for prior dealings and trade norms to clarify or supplement the terms of a contract.
The conduct of the parties regarding the performance of a contract over time, particularly when they have an ongoing contractual relationship.
The sequence of previous transactions between the parties, which can provide context for interpreting agreements.
Generally accepted practices or methods of dealing in a particular trade or industry that can inform the terms of a contract.
Example 1
If a seller and buyer continually follow the same procedures for delivery and payment in their past transactions, those practices can help to clarify the terms of their current contract.
Example 2
In a contract involving the sale of perishable goods, if it is customary in the industry to deliver the goods within a certain timeframe, that usage of trade may override a seemingly contrary term in the contract.