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.

West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.
References in periodicals archive ?
The group notes that the Supreme Court of Liberia has held every contractual obligation needs not to be in writing, arguing that it may be oral and can be ascertained from a course of dealing between the parties.
The creditors also argued that the relief sought by the motion: (a) undermines the legislative history of Section 503(b)(9); (b) infringes on their state law setoff rights; (c) allows the debtors to use Section 558 as a sword, not as a defensive shield; and (d) fails to recognize that the debtors' setoff rights might be limited by the debtors' and creditors' contract and prior course of dealing.
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.
Subsequent chapters cover the various aspects of the doctrine: general principles of terms implied at common law; specific instances of terms implied at common law; terms implied by custom, usage, or by course of dealing; terms implied by statute; and terms implied in fact.
"During the course of dealing with the incident, a firefighter suffered burns to his hands."
What is problematic with the Courts' findings, and the author's analysis of those findings, is that neither the single claim pleaded against the retail broker by the insured in the amended complaint, nor the evidence adduced in the record before the trial Court, asserted a theory of recovery based upon a course of dealing between the insured and the retailer.
Responding to a question, he said the bigger provinces should change its course of dealing with small provinces.
characterizes the history of contracting between two parties as a "course of dealing." (11) In general terms, it represents the behavioral patterns exhibited by two parties over a course of previous contract performances.
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.