Editing Contracts/Course of dealing
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[https://www.law.cornell.edu/ucc/1/1-303 UCC § 1-303(b)]. "Course of dealing," as defined in subsection (b), is restricted, literally, to a sequence of conduct between the parties previous to the agreement. A sequence of conduct after or under the agreement, however, is a "[[course of performance]]."<ref>Cmt. 2, UCC § 1-303.</ref> | [https://www.law.cornell.edu/ucc/1/1-303 UCC § 1-303(b)]. "Course of dealing," as defined in subsection (b), is restricted, literally, to a sequence of conduct between the parties previous to the agreement. A sequence of conduct after or under the agreement, however, is a "[[course of performance]]."<ref>Cmt. 2, UCC § 1-303.</ref> | ||
Even though, according to the [[parol evidence rule]], words and terms in a writing intended to be the final expression of the agreement of the parties may not be contradicted by extrinsic evidence of a prior or contemporaneous agreement, extrinsic evidence in the form of course of dealing nonetheless may be used to explain or supplement the writing. An [[integration clause]] in a contract, stating that the parties intend the writing to be a complete and exclusive statement of the terms of the agreement does not suffice to negate the importance of course of dealing, "because these are such an integral part of the contract that they are not normally disclaimed by general language in the [[merger clause]]."<ref>'' | Even though, according to the [[parol evidence rule]], words and terms in a writing intended to be the final expression of the agreement of the parties may not be contradicted by extrinsic evidence of a prior or contemporaneous agreement, extrinsic evidence in the form of course of dealing nonetheless may be used to explain or supplement the writing. An [[integration clause]] in a contract, stating that the parties intend the writing to be a complete and exclusive statement of the terms of the agreement does not suffice to negate the importance of course of dealing, "because these are such an integral part of the contract that they are not normally disclaimed by general language in the [[merger clause]]."<ref>''Allapattah Servs. v. Exxon Corp.'', 61 F. Supp. 2d 1308, 1314 (S.D. Fla. 1999).</ref> | ||
Under the common law, extrinsic evidence such as course of dealing could be considered only the written contract was ambiguous.<ref>See, e,g, ''Pepcol Mfg. v. Denver Union Corp.'', 687 P.2d 1310, 1314 (Colo. 1984) ("It is only where the terms of an agreement are ambiguous or used in some special or technical sense not apparent from the contractual document itself that the court may look beyond the four corners of the agreement in order to determine the meaning intended by the parties.").</ref> By contrast, "Under the UCC, the lack of facial ambiguity in the contract language is basically irrelevant to whether extrinsic evidence ought to be considered by the court as an initial matter."<ref>See '' | Under the common law, extrinsic evidence such as course of dealing could be considered only the written contract was ambiguous.<ref>See, e,g, ''Pepcol Mfg. v. Denver Union Corp.'', 687 P.2d 1310, 1314 (Colo. 1984) ("It is only where the terms of an agreement are ambiguous or used in some special or technical sense not apparent from the contractual document itself that the court may look beyond the four corners of the agreement in order to determine the meaning intended by the parties.").</ref> By contrast, "Under the UCC, the lack of facial ambiguity in the contract language is basically irrelevant to whether extrinsic evidence ought to be considered by the court as an initial matter."<ref>See ''Amoco Prod. Co. v. W. Slope Gas Co.'', 754 F.2d 303, 307-08 (10th Cir. 1985). See also Cmt. 1(c), UCC § 1-303: "This section definitely rejects the requirement that a condition precedent to the admissibility of the type of evidence specified in paragraph (a) is an original determination by the court that the language used is ambiguous.").</ref> | ||
Evidence of course of dealing will be disallowed, however, if it is "carefully negated" in the parties' contract by "specific and unequivocal" language.<ref>''Precision Fitness Equip., Inc. v. Nautilus, Inc.'', Civil Action No. 08-cv-01228-CMA-KLM, 2011 U.S. Dist. LEXIS 13576, at *25 (D. Colo. Feb. 2, 2011) (collecting cases). In that case the parties carefully negated course of dealing by including the following sentence in the Agreement: "Past practice and terms of dealing between [Nautilus] and [Precision], or in the industry generally, shall not be used to . . . interpret the terms of this Agreement." | Evidence of course of dealing will be disallowed, however, if it is "carefully negated" in the parties' contract by "specific and unequivocal" language.<ref>''Precision Fitness Equip., Inc. v. Nautilus, Inc.'', Civil Action No. 08-cv-01228-CMA-KLM, 2011 U.S. Dist. LEXIS 13576, at *25 (D. Colo. Feb. 2, 2011) (collecting cases). In that case the parties carefully negated course of dealing by including the following sentence in the Agreement: "Past practice and terms of dealing between [Nautilus] and [Precision], or in the industry generally, shall not be used to . . . interpret the terms of this Agreement." | ||
