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then, will the buyer be deemed to bear the risk of loss. [U.C.C. § 2-510(3) (1951); 2 Hawkland UCC Series § 2-510:2, Westlaw (database updated June 2021).]
Course of Performance, Course of Dealing, and Usage of Trade Apart from the agreement’s express language, perhaps the most important factors in interpreting any contract for the sale of goods are course of performance, course of dealing, and usage of trade. To that end, the UCC sets forth fairly detailed rules on how these factors play into contract interpretation and how to establish them for that purpose. 1. Course of Performance and Course of Dealing Course of performance references the parties’ sequence of conduct in connection with a specific transaction. A course of performance exists only if (1) the parties’ agreement concerning the transaction contemplates repeated occasions for performance by at least one party, and (2) the other party knows of the performance’s nature and has a chance to object to it, but the other party accepts the performance or acquiesces to it without objection. Conceptually similar, but quite distinct, from course of performance is course of dealing. A course of dealing is a sequence of conduct involving transactions between the parties that arose prior to the agreement being interpreted. The prior sequence of conduct must be fairly regarded as establishing a common basis for understanding to interpret the parties’ expressions and other acts. [U.C.C. § 1-303(a)-(b) (2001).] a. Sequence of Conduct A course of performance is a sequence of conduct pursuant to or arising after the agreement being interpreted. A course of dealing is a sequence of conduct arising before the agreement being interpreted. Either way, for there to be a course of performance or course of dealing, there must be a sequence of conduct. Thus, though a singular act by any party can afford insight into the parties’ intent, it can never establish a course of performance or of dealing. In a course of dealing, the sequence may concern multiple acts within a single prior transaction or multiple prior transactions. [U.C.C. § 1-303, cmt. 2 (2001); 1 Hawkland UCC Series § 1-303:3, Westlaw (database updated June 2021).] b. Common Basis for Understanding A course of dealing requires a prior sequence of conduct establishing a common basis for understanding to interpret the parties’ expressions and other conduct. The prior conduct need not be identical to the transaction being interpreted. However, the prior conduct must be sufficiently similar to the present transaction, making it probable that the parties intended to give the current transaction the same meaning as the prior one(s). Of course, in drawing the necessary analogies here, one must consider all factors relevant to how
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