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AMI 2511 Course of Dealing, Usage of Trade, Course of Performance

Arkansas Supreme Court Committee On Jury Instructions-Civil

Ark. Model Jury Instr., Civil AMI 2511
Arkansas Model Jury Instructions-Civil
November 2021 Update
Arkansas Supreme Court Committee On Jury Instructions-Civil
Chapter 25. UCC Sales Contracts
AMI 2511 Course of Dealing, Usage of Trade, Course of Performance
[“Course of performance” means a sequence of conduct between the parties to a particular transaction that exists if the agreement of the parties with respect to the transaction involves repeated occasions for performance by a party and the other party, with knowledge of the nature of the performance and opportunity for objection to it, accepts the performance or acquiesces in it without objection.]
[“Course of dealing” means a sequence of conduct concerning previous transactions between the parties to a particular transaction that is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct.]
[“Usage of trade” means any practice or method of dealing having such regularity of observance in a place, vocation, or trade as to justify an expectation that it will be observed with respect to the transaction in question.]
[A course of performance or course of dealing between parties or usage of trade in the vocation or trade in which they are engaged or which they are or should be aware is relevant in ascertaining the meaning of the parties' agreement, and may supplement or qualify the terms of the agreement. A usage of trade applicable in the place in which part of the performance under the agreement is to occur may be so utilized as to that part of the performance.]
[The express terms of an agreement and any applicable course of performance, course of dealing, or usage of trade must be construed whenever reasonable as consistent with each other. If such a construction is unreasonable, (a) express terms prevail over course of performance, course of dealing, and usage of trade; (b) course of performance prevails over course of dealing and usage of trade; and (c) course of dealing prevails over usage of trade.]
NOTE ON USE
Use the appropriate portions of this instruction when one or more of the terms defined in the instruction appear in another instruction or otherwise as warranted by the evidence.
COMMENT
This instruction is based on Ark. Code Ann. § 4-1-303.
The existence and scope of usage of the trade must be proved as facts. Id. § 4-1-303(c). If it is established that such a usage is embodied in a trade code or similar record, the interpretation of the record is a question of law. Id. Evidence of a relevant usage of trade offered by one party is not admissible unless that party has given the other party notice that the court finds sufficient to prevent unfair surprise to the other party. Id. § 4-1-303(g).
Subject to the provisions of Ark. Code Ann. § 4-2-209 concerning modification and waiver, course of performance is relevant to show a waiver or modification of any term inconsistent with such course of performance. Id. § 4-1-303(f).
Course of performance, course of dealing and usage of trade evidence is admissible to explain or supplement, but not to contradict, a written contract intended to be a final expression of the parties' agreement, and to show modifications made after a contract. Id. § 4-2-202(a); see also L.F. Brands Mktg., Inc. v. Dillard's, Inc., 2009 Ark. App. 174, 314 S.W.3d 736. There is no requirement that the contract be declared ambiguous before such evidence is admissible. See L.F. Brands Mktg., Inc., supra.
When a contract does not contain non-waiver and no-unwritten-modification clauses and a course of performance in accepting late payments from the debtor is established, the creditor waives its right to insist on strict compliance with the contract and must give notice to the debtor that it will no longer accept late payments before it can declare default of the debt. However, if a contract includes non-waiver and no-unwritten-modification clauses, the creditor, in accepting late payments, does not waive its right under the contract to declare default of the debt, and need not give notice that it will enforce that right in the event of future late payments. See Minor v. Chase Auto Finance Corp., 2010 Ark. 246, 372 S.W.3d 762.
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