Courts will consider course of performance in construing a contract only after considering course of dealing.
What is the difference between course of performance and Course of dealing?
- The term "course of dealing," as used in paragraph (b), is literally limited to a series of actions taken by the parties prior to the agreement.
- However, a "course of performance" is a series of actions taken after or in accordance with the agreement.
- The term "course of dealing" may be included in the agreement through express language or implied acknowledgement.
- In the event that such a construction is erroneous, the following rules apply: (1) express terms take precedence over course of performance, course of dealing, and usage of trade; (2) course of performance takes precedence over course of dealing and usage of trade; and (3) course of dealing takes precedence over usage of trade.
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