course of performance

course of performance. A sequence of previous performance by either party after an agreement has been entered into, when a contract involves repeated occasions for performance and both parties know the nature of the performance and have an opportunity to object to it. • A course of performance accepted or acquiesced in without objection is relevant to determining the meaning of the agreement. Cf. COURSE OF DEALING; trade usage under USAGE. [Cases: Contracts 170. C.J.S. Contracts § 340.]

“[C]ommon law courts have recognized the necessity of learning how people usually talk and what they usually mean by their language before one interprets their contracts…. ‘[C]ourse of performance’ refers to a pattern of performance of the contract that is the subject of the dispute, as contrasted to ‘course of dealing’ which refers to the pattern of performance in prior contracts between the same parties.” Claude Rohwer & Gordon D. Schaber, Contracts in a Nutshell 171–73 (4th ed. 1997).

“The phrase ‘course of performance’ relates to the way the parties have acted in performance of the particular contract in question. The judicial inquiry on this point is limited to the way the parties have acted in carrying out the particular contract that is in controversy, as distinguished from a general pattern of dealing that may embrace many other contracts or transactions between the parties.” Ronald A. Anderson, Uniform Commercial Code § 1-205:74 (1997).


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