Course of Dealing

Course of Dealing

A clearly recognizable pattern of previous conduct between parties to a business transaction.

The course of dealing between parties to an action is examined by a court in ascertaining what the parties intended when they entered into a contract. The supposition is that the parties drew up the contract in view of the customary manner in which business had been transacted prior to the signing of the contract.

In a breach-of-contract action, evidence of the course of dealing is admissible in order to interpret ambiguities in the contract, but not to effectuate an alteration or contradiction of the contract's provisions. A term that was seemingly unambiguous when the contract was entered into might subsequently prove to be problematic.

Course of dealing is distinguishable from both Course of Performance and Trade Usage. Course of performance refers to a pattern of conduct that occurs subsequent to approval of the contract terms. Trade usage entails behavior that is the standard of conformity for a majority of businesses engaged in a particular business or commercial venture.

Course of dealing safeguards the expectations of the parties and augments the certainty of their transactions, based upon their prior experiences with each other.

The concepts of course of dealing, course of performance, and trade usage in the context of contract law are derived largely from the work of linton corbin, who did not believe that courts should be bound by the so-called four corners of a contract or to the "plain meaning" to those terms. Corbin was instrumental in the drafting of the Uniform Commercial Code (UCC), which governs commercial agreements and transactions in most states. The UCC defines course of dealing in its general provisions (U.C.C. § 1-205). The term applies, for example, to the laws governing contracts for the sale of goods, negotiable instruments, and Secured Transactions.

References in periodicals archive ?
He added: "I've not seen a better one, frankly, in the course of dealing with quite a few years of fraud.
Whether an insurance salesman is an agent of the insurance company is fact sensitive and requires a consideration of many factors, including the relation of the parties, their actions, usual course of dealing, any instructions given to the person by the company, the conduct of the parties generally, and the nature of the transaction.
During the course of dealing with the incident, a firefighter suffered burns to his hands.
Responding to a question, he said the bigger provinces should change its course of dealing with small provinces.
While there is little case law exploring the contours of the common interest doctrine under these circumstances, it is apparent that a court would need to consider the unique facts of each particular case, including the course of dealing between the carrier and the insured as well as the nature of the documents or information at issue.
In the course of dealing with literally thousands of customers over the years, IT experts at TSG have heard more than their fair share of nightmare tales.
Alternating by chapters with the foregoing, there also is a third story of Henderson, a British army officer who had lost an eye but gained a very special spear, an African assegai, in the course of dealing with assorted renegades and the like in the "Dark Continent", during the days of Empire.
Under the UCC, an "agreement" is defined as "the bargain of the parties in fact as found in their language or by implication from other circumstances, including, course of dealing or usage of trade or course of performance.
Over the course of dealing with hundreds of such clients, the ZAG members have identified common issues and problems that crop up when the men and women of medicine turn to a realm in which most do not know how to operate: the financial marketplace.
Whether the taxpayer and the customer's course of dealing is relevant.
Courts nevertheless may find authority to exist on legal theories such as ambiguity interpreted by course of dealing and ratification.