Course of Performance

Course of Performance

Evidence of the conduct of parties concerning the execution of obligations under a contract requiring more than one performance that is used for the purpose of interpreting the contract's provisions.

Course of performance refers to the systematic and uniform conduct in which parties engage after they enter into a contract. The intent of the parties in regard to the meaning of the agreement is reliably ascertainable through the application of course of performance only when a contract requires a repetitive series of performances. There must be more than one performance, but no particular number is required. The fewer the performances, the more probable it is that such performances cannot constitute a course of performance.

If a party accepts a course of performance without objection, his or her Acquiescence is relevant to determining the meaning of the contract. The recipient of the performance need not expressly assent to the performance; the lack of an objection is sufficient. Unless there has been acceptance without objection, a party who performs cannot benefit from the application of course of performance.

Sometimes the acts of the parties may be inconsistent with the pertinent contractual language. A party may argue that the meaning of the agreement is unequivocal—that the course of performance is inconsistent with the contract provisions—and, therefore, that the express terms of the contract should predominate over the course of performance.

The prevailing view is that no contractual term is so clearly defined that a party cannot demonstrate the way in which the parties actually applied it. Pursuant to the admissibility of the course of performance, and assuming that this evidence is credible, the language selected by the parties has the meaning that they had ascribed to it, and, therefore, no inconsistency exists between the contract provisions and the course of performance.

A minority of jurisdictions hold that some words have a plain meaning and, consequently, that course of performance is inadmissible to show their meaning when they are not ambiguous. Other courts reason that it is relevant to show that there has been either a waiver, an intentional relinquishment of a known right, or a modification of the contract before the application of course of performance.

The concept of course of performance in the context of contract law, along with such concepts as course of dealing and Trade Usage, is derived largely from the work of Arthur Linton Corbin. One of the leading theorists in the field of contract law in the twentieth century, Corbin did not believe that courts should be bound by a formal reading of the "four corners" of the contract. Corbin was instrumental in the drafting of the Uniform Commercial Code (UCC), which governs commercial agreements and transactions in most states. Under the UCC, courts may consider course of performance of the parties in order to determine, for example, whether the parties have formed a contract for the sale or lease of goods (U.C.C. §§ 2-208, 2A-207).

Cross-references

Plain-Meaning Rule.

References in periodicals archive ?
In the course of performance of this procurement contract, the tenderer will be required to supply the tenderer with a total quantity of diesel fuel and assortment for a period of three years from the conclusion of the contract.
He pointed out that a change of the culture of the institutions concerned is needed to apply radical change, through their inclusion in competitive laboratories so as to help them to bring added value to the government provided that institutions' senior leaders, he said, should be involved in the process due to its positive impact on directing the course of performance.
After the visit, the general said he was not at all against Sunnis but against a political trend, led by Saad Hariri, taking the false course of performance.
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The second section, "Cultivating the Soloist's Skills," covers in a refreshing and meticulously detailed fashion developing musicians' attempts to come to terms with the formal models that underlie jazz improvisation: imitating and adapting the work of exemplary performers, gaining facility with rhythm and harmony, learning how to create continuity within a solo and correct mistakes in the course of performance, among other things.
6) Most importantly, it is the basis of the Code's definition of agreement, which includes "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.
sampling and their analyzes with evaluation in the course of performance levels 1 to 4 as well as for free measurement after completion of conversion / refurbishment work.
the contracting authority has the right, in the course of performance of the contract, to include to the sites to which electricity and other objects are supplied provided that the object is handed over to the assignor for maintenance and exploitation, as well as to request the exclusion of objects, the latter not changing the subject and the estimated quantities of the procurement as a whole.
The advertiser assumes that during the period of effectiveness of the contract, The contractor will collect around 800 pieces of rebuilt wheels in the course of performance.
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