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Usage is habitual or customary practice.
§220. USAGE RELEVANT TO INTERPRETATION Illustrations.... 9. In an integrated contract, A promises to sell and B to buy a certain quantity of ‘white arsenic’ for a stated price. The parties contract with a reference to a usage of trade that ‘white arsenic’ includes arsenic colored with lamp black. The usage is part of the contract. §221. USAGE SUPPLEMENTING AN AGREEMENT An agreement is supplemented or qualified by a reasonable usage with respect to agreements of the same type if each party knows or has reason to know of the usage and neither party knows or has reason to know that the other party has an intention inconsistent with the usage. Comment: a. Agreed terms and omitted terms. Where the parties have in fact agreed to incorporate a usage into their agreement, the case is within §220. This Section extends the same principle to cases where the parties did not advert to the problem with which the usage deals, or where one or each separately foresaw the problem but failed to manifest any intention with respect to it. In such cases, in the absence of usage, the court would supply a reasonable term. See §204. But if there is a reasonable usage which supplies an omitted term and the parties know or have reason to know of the usage, it is a surer guide than the court's own judgment of what is reasonable. Thus a usage may make it unnecessary to inquire into or prove what the actual intentions of the parties were with respect to an unstated term. Compare Uniform Commercial Code §§1-205(3), 2-202(a). Illustrations: 1. A, a canner, and B, a wholesale grocer, contract for the sale by A to B of canned fruit products, using a standard form of contract approved by canning and wholesale grocer trade associations. By uniform usage among canners, where the standard form is used title to unshipped goods passes on billing dates specified on the form. In the absence of contrary indication, the usage is part of the contract. 2. A, an ordained rabbi, is employed by B, an orthodox Jewish congregation, to officiate as cantor at specified religious services. At the time the contract is made, it is the practice of such congregations to seat men and women separately at services, and a contrary practice would violate A's religious beliefs. At a time when it is too late for A to obtain substitute employment, B adopts a contrary practice. A refuses to officiate. The practice is part of the contract, and A is entitled to the agreed compensation. b. Reason to know and reasonableness. The more general and well-established a usage is, the stronger is the inference that a party knew or had reason to know of it. Similarly, the fact that a usage is reasonable may tend to show that the parties contracted with reference to it or that a particular party knew or had reason to know of it.... Illustrations.... 4. A, a publisher, contracts with B to publish a two-volume work. The contract provides for binding "10,000 copies at .538," which by usage of the publishing business refers to the number of volumes rather than the number of sets. The usage is part of the contract even though the work is B's first and he does not know of the usage. (1) A usage of trade is a usage having such regularity of observance in a place, vocation, or trade as to justify an expectation that it will be observed with respect to a particular agreement. It may include a system of rules regularly observed even though particular rules are changed from time to time. (2) The existence and scope of a usage of trade are to be determined as questions of fact. If a usage is embodied in a written trade code or similar writing the interpretation of the writing is to be determined by the court as a question of law. (3) Unless otherwise agreed, a usage of trade in the vocation or trade in which the parties are engaged or a usage of trade of which they know or have reason to know gives meaning to or supplements or qualifies their agreement. Comments.... b. Regularity of observance. A usage of trade need not be "ancient or immemorial," "universal," or the like. Unless agreed to in fact, it must be reasonable, but commercial acceptance by regular observance makes out a prima facie case that a usage of trade is reasonable. There is no requirement that an agreement be ambiguous before evidence of a usage of trade can be shown, nor is it required that the usage of trade be consistent with the meaning the agreement would have apart from the usage. Illustrations: 1. A contracts to sell B 10,000 shingles. By usage of the lumber trade, in which both are engaged, two packs of a certain size constitute 1,000, though not containing that exact number. Unless otherwise agreed, 1,000 in the contract means two packs. 2. A contracts to sell B 1,000 feet of San Domingo mahogany. By usage of dealers in mahogany, known to A and B, good figured mahogany of a certain density is known as San Domingo mahogany, though it does not come from San Domingo. Unless otherwise agreed, the usage is part of the contract. 3. A and B enter into a contract for the purchase and sale of "No. 1 heavy book paper guaranteed free from ground wood." Usage in the paper trade may show that this means paper not containing over 3% ground wood. |
V° USAGES _____________ |
RESTATEMENT (SECOND) OF CONTRACTS