Main Course of Dealing and Usage of Trade

The Uniform Civil Code came to be established in the United States of America to provide for integrating business and trade mannerisms across the country entails how the course of dealing and usage of trade are defined. The terms indicate the history and record of transactions between the parties in case of ambiguity and confusion between them. It investigates information from business traditions and customs of the market and interprets them in case of any ambiguity or dispute between the parties. The record and history of transactions between two parties help understand the nature of the contract drawn between them currently and thus helps to cover any gaps that remained blank between them in the contract. Thus, it helps fill in the gaps that were left blank due to plain oversight in an agreement or transaction. These assist in understanding the contract or agreement by aiding, deducing, and inferring the terms laid under an agreement. They function as implied terms of the agreement even though it has not been noted down by the parties. The knowledge in such aspects is highly beneficial for international commercial transactions between business corporations. The parameters from which the Court of Law interprets and infer the transactions can be understood from the points that are purpose, validating existence, and admissibility before the court of law.

Firstly, the main purposes of both terms are to comprehend the language of trade or business. The trade jargon used in everyday business is unlike the day-to-day activities. Right from short forms like BOL, which means bill of lading, FOB indicates freight overboard to terms like books profits and demo trading. These terms are so commonly used by the traders and individuals in the business that they do not need to be mentioned and discussed recurrently in the agreements. The trade customs dictate how certain goods must be shipped and how they must be stored for future use.

Second, they provide for deficient clauses in the agreement. Inadvertently, if the concepts mentioned hereinabove are not discussed in the contract, the contract itself does not deem to be invalid in the eyes of the law. The Court of Law can look into the common customs and usages of the market.

Validating Existence
The manner and fashion the Court of Law interprets a contract or agreement are dependent on how the court infers the clauses under it. It does not happen that on an everyday basis, the court is required to look outside the contract to understand the obligations of the parties to it. If by a plain reading of the agreement, the court concludes that further information is required only then the parties are called upon to submit evidence regarding the past transactions between them to understand the nature of the transaction.

On the other hand, customs or usage to be considered valid and legal have to pass the litmus test of time, reasonableness, practiced in a specific area, should not be barred by law. Only then such a custom or usage would be considered by the Court of Law as a valid one.

Example: ‘A’ and ‘B’ have been dealing in perishable goods with each other for the past ten years. They execute a contract for the delivery of 100 boxes of mangoes. They, however, forget to mention the point from where the obligations, costs, and risks transfer from the buyer to the seller, i.e., the FOB. Nevertheless, they complete the transaction as their usual practice. As a result, the goods are safely delivered to ‘B.’ In case of any problems with the FOB, the court would have looked into the previous transactions and contracts to understand the duties and responsibilities of the parties hereto.

Admissibility before the Court of Law
To prove the course of dealing and usage of trade, written and oral evidence must be adduced as required by the court to law to support the contention of either party to prove the existence or non-existence of such usage of trade or previous transactions of similar nature. They can be in either the written or oral form of evidence.

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