Sales and Leases | 112
3. Hierarchy of Interpretation: Express Terms, Course of Performance, Course of Dealing, and Usage of Trade As a general rule, the agreement’s express terms and any applicable course of performance, course of dealing, and usage of trade must be construed consistently with each other. But if this sort of construction is unreasonable: express terms control course of performance, course of dealing, and usage of trade; course of performance controls course of dealing and usage of trade; and course of dealing controls usage of trade.
[U.C.C. § 1-303(e) (2001); but see Special Rule Regarding Course of Performance, infra .]
a. Special Rule Regarding Course of Performance Subject to the rules in § 2-209 (dealing with modification, rescission, and waiver), if a course of performance is inconsistent with any term, the course of performance is relevant to show a waiver or modification of that term. [U.C.C. § 1-303(f) (2001); Modification, Rescission, and Waiver, supra .] IV. Creditors and Good-Faith Purchasers Article 2 rightly focuses much of its text on the relationship between buyer and seller. But in any transaction, the buyer and seller do not operate in a vacuum. Any sale of goods may impact the rights of third parties, particularly (1) the seller’s creditors or (2) good-faith purchasers of the goods. Article 2 sets forth rules to determine these third parties’ rights in connection with sales of goods. In this vein, Article 2 sets forth default rules on when title to the goods passes from the seller to the buyer. Passing of Title and Reservation of Security One of Article 2’s prime policy goals was to deemphasize the role of title in contracts for the sale of goods and, correspondingly, emphasize the role of contract performance. To that end, per § 2- 401, except insofar as a given provision of Article 2 references title to the goods, Article 2’s provisions regarding the rights, duties, and remedies of the buyer, the seller, and any third parties apply without regard to title to the goods. For instance, the rules on risk of loss apply regardless of who has title. But sometimes, title becomes relevant. If no provision other than § 2- 401 speaks to the situation, § 2-401 articulates the applicable rules concerning title. Examples include many matters outside the scope of Article 2, including tax liability, placing a lien on the goods, insurance coverage, products-liability law, and more. [U.C.C. § 2-401, cmt. 1 (1951); 2 Hawkland UCC Series § 2-401:1, Westlaw (database updated June 2021).]
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