Usage, course of dealing, and course of performance under the UCC - Next Generation Bar Exam

1. Under UCC 1-303(c), how are the existence and scope of a usage of trade proved?

   As facts, unless the usage is in a written trade code, which the court interprets. The proponent must prove that the practice is regularly observed in the relevant place or trade.

2. Under UCC 1-303, which usage may be used to interpret the part of an agreement performed in a particular place?

   The usage in the place where that part of the performance is to occur. This prevents surprise when performance occurs in a locality with its own practices.

3. Under the UCC, what may usage of trade do beyond interpreting express terms?

   Supplement or qualify the terms of the agreement. Usage can add terms the writing does not address, so long as they are consistent with it.

4. Under the UCC, when does an express term override a conflicting usage of trade?

   When the two cannot reasonably be construed as consistent. Courts first try to read express terms and usage together.

5. Under UCC 1-303(g), what must a party do before offering evidence of a usage of trade?

   Give the other party notice sufficient to prevent unfair surprise. The court decides whether the notice was adequate.

6. A contract for steel rod is silent on quantity tolerance, and trade usage permits deliveries within 5 percent of the stated amount. On what basis does a delivery of 97 percent conform?

   Usage of trade supplements the contract with the 5 percent tolerance. Usage fills a gap the express terms leave open.

7. Under UCC 1-303(e), what is the order of priority among express terms, course of performance, course of dealing, and usage of trade?

   Express terms, then course of performance, then course of dealing, then usage of trade. The hierarchy applies only when the sources cannot reasonably be construed as consistent.

8. A contract states, 'Delivery no later than May 1; time is of the essence.' Trade usage allows a 10-day grace period. On what basis may the buyer reject a May 8 delivery?

   The express term controls over the inconsistent usage. An explicit time-is-of-the-essence term cannot reasonably be read to include a grace period.

9. Under UCC 1-303(a), what conditions create a course of performance?

   Repeated occasions for performance, the other party's knowledge of its nature, and acceptance without objection. A single instance of performance does not establish a course of performance.

10. Under UCC 1-303(f), what may a course of performance show regarding an inconsistent express term?

    A waiver or modification of that term. Repeated acceptance of nonconforming performance can change the parties' obligations going forward.

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