Washington and Lee Law Review Volume 30 | Issue 1 Article 6 Spring 3-1-1973 Admissibility of Evidence of Course of Dealing and Usage of Trade Under Uniform Commercial Code § 2-202(a) Follow this and additional works at: https://scholarlycommons.law.wlu.edu/wlulr Part of the Commercial Law Commons, and the Evidence Commons Recommended Citation Admissibility of Evidence of Course of Dealing and Usage of Trade Under Uniform Commercial Code § 2-202(a), 30 Wash. & Lee L. Rev. 117 (1973), https://scholarlycommons.law.wlu.edu/wlulr/vol30/ iss1/6 This Note is brought to you for free and open access by the Washington and Lee Law Review at Washington & Lee University School of Law Scholarly Commons. It has been accepted for inclusion in Washington and Lee Law Review by an authorized editor of Washington & Lee University School of Law Scholarly Commons. For more information, please contact [email protected]. 1973] NOTES AND COMMENTS within the meaning of § 2036(a)(2) if the settlor must exercise the power in a general fiduciary capacity. It is apparently irrelevant that the fidu- ciary duty is owed to parties other than the beneficiaries and remainder- men of the trust. The impact of United States v. Byrum on estate planning and taxation will ultimately depend upon the reading and interpretation given the decision by the lower courts as they apply § 2036(a) in future cases. The likelihood of misinterpretation and inconsistent interpretation is high. Congress may or may not choose to amend § 2036(a) to encompass situations such as that in Byrum, but in any event amendment to the statute is needed to bring clarity to the law. T. N. MCJUNKIN ADMISSIBILITY OF EVIDENCE OF COURSE OF DEALING AND USAGE OF TRADE UNDER UNIFORM COMMERCIAL CODE § 2-202(a) A businessman generally contracts without conscious reference to the customs and usages of his trade and to his prior course of dealing. Conse- quently, he rarely includes these commercial understandings expressly in his writings.' Therefore, in attempting to construe a contract to conform to the intentions and expectations of the parties at the time the agreement was drafted,2 some courts have been cognizant of the reality of the market place and have permitted course of dealing and usage of trade to be utilized in interpretation.3 Since virtually all jurisdictions have adopted 'Nicoll v. Pittsvein Coal Co., 269 F. 968, 971 (2d Cir. 1920). 'See 3A CORBIN, CONTRACTS § 538 (1960); S.WILLISTON, CONTRACTS § 600 (3d ed. 1961). 2E.g., McAfee v. City of Garnett, 205 Kan. 269, 469 P.2d 295, 299 (1970). 'The following are the state statutes containing the language of Uniform Commercial Code § 1-205: ALA. CODE tit. 7A, § 1-205 (1966); ALASKA STAT. § 45.05.028 (1962); ARIz. REV. STAT. § 44-2212 (1967); ARK. STAT. ANN. § 85-1-205 (1961); CAL. COMM. CODE § 1205 (West 1964); COLO. REV. STAT. ANN. § 155--205 (1963); CONN. GEN. STAT. REV. § 42a-1-205 (1960); DEL. CODE ANN. tit. 5A, § 1-205 (Spec. UCC Pamphlet 1967); D.C. CODE ANN. § 28:1-205 (1967); FLA. STAT. ANN. § 671.1-205 (1966); GA. CODE ANN. § 109A-1-205 (1962); HAWAII REV. LAWS § 490:1-205 (1968); IDAHO CODE ANN. § 28-1-205 (1967); ILL. ANN. STAT. ch. 26, § 1-205 (Smith-Hurt 1963); IND. ANN. STAT. § 19-1-1-205 (repl. vol. 1964); IOWA CODE ANN. § 554.1205 (1967); KAN. STAT. ANN. § 84-1-205 (1965); Ky. REV. STAT. ANN. § 355.1-205 (1969); ME. REV. STAT. ANN. tit. 11,§ 1-205 (1964); MD. ANN. CODE art. 95 B, § 1-205 (1963); MASS. GEN. LAWS ch. 106, § 1-205 (1963); MICH. STAT. ANN. § 19.1205 (rev. vol. 1964); MINN. STAT. ANN. § 336.1-205 (1966); MISS. CODE ANN. § 41A:1-205 (Spec. UCC Supp. 1967); Mo. ANN. STAT. § 400.1-205 (1965); MONT. REV. CODES AN. § 87A-1-205 (1964); NEB. REV. STAT. UCC § 1-205 (1964); NEV. REV. STAT. § 104.1205 (1967); N.H. REV. STAT. 118 WASHINGTON AND LEE LAW REVIEW [Vol. XXX the Uniform Commercial Code4 (hereinafter UCC) with its accommoda- tion of law to commercial convention,5 courts may now refer to UCC §§ 1-2051 and 2-202;1 these sections permit the written terms of a ANN. § 382A:1-205 (1961); N.J. REV. STAT. § 12A:1-205 (1962); N.M. STAT. ANN. § 50A-1-205 (1962); N.Y. UCC § 2-202 (McKinney 1964); N.C. GEN. STAT. § 25- 1-205 (repl. vol. 1965); N.D. CENT. CODE § 41-01-205 (1965); OHIO REV. CODE ANN. § 1301.11 (Baldwin 1964); OKLA. STAT. ANN. tit. 12A, § 1-205 (1963); ORE. REV. STAT. § 71.2050 (1963); PA. STAT. ANN. tit. 12A, § 1-205 (1970); R.I. GEN. LAWS ANN. § 6A-1-205 (1961); S.C. CODE ANN. § 10.1-205 (1966); S.D. CODE § 57-1-15-57-1- 20 (1969); TENN. CODE ANN. § 47-1-205 (repl. vol. 1964); TEx. Bus. & COMM. CODE § 1- 205 (1968); UTAH CODE ANN. § 70A-1-205 (repl. vol. 1968); VT. STAT. ANN. tit. 9A, § 1- 205 (1966); VA. CODE ANN. § 8.1-205 (1965); WASH. REV. CODE ANN. § 62A.1-205 (Supp. 1970); W. VA. CODE ANN. § 46-1-205 (1966); WIS. STAT. ANN. § 401.205 (1964); Wyo. STAT. ANN. § 34-1-205 (Supp. 1969). None of the jurisdictions listed above has enacted UCC § 1-205 in a form different than the official code. Louisiana has not adopted the UCC. The following are the state statutes containing the language of Uniform Commercial Code § 2-202: ALA. CODE tit. 7A, § 2-202 (1966); ALASKA STAT. § 45.05.052 (1962); ARIZ. REV. STAT. § 44-2309 (1967); ARK. STAT. ANN. § 85-2-202 (1961); CAL. COMM. CODE § 2202 (West 1964); COLO. REV. STAT. ANN. § 155-2-202 (1963); CONN. GEN. STAT. REV. § 42a-2-202 (1960); DEL. CODE ANN. tit. 5A, § 2-202 (Spec. UCC Pamphlet 1967); D.C. CODE ANN. § 28:2-202 (1967); FLA. STAT. ANN. § 671.2-202 (1966); GA. CODE ANN. § 109A-2-202 (1962); HAWAII REV. LAWS § 490:2-202 (1968); IDAHO CODE ANN. § 28-2-202 (1967); ILL. ANN. STAT. ch. 26, § 2-202 (Smith-Hurd 1963); IND. ANN. STAT. § 19-1-2-205 (repl. vol. 1964); IOWA CODE ANN. § 554.2202 (1967); KAN. STAT. ANN. § 84-2-202 (1965); Ky. REv. STAT. ANN. § 355.2-202 (1969); ME. REV. STAT. ANN. tit. 11, § 2-202 (1964); MD. ANN. CODE art. 95B, § 2-202 (1963); MAsS. GEN. LAWS ANN. ch. 106, § 2-202 (1963); MICH. STAT. ANN. § 19.2202 (rev. vol. 1964); MINN. STAT. ANN. § 336.2-202 (1966); MISS. CODE ANN. § 41A:2-202 (Spec. UCC Supp. 1967); Mo. ANN. STAT. § 400.2-202 (1965); MONT. REV. CODES ANN. § 87A-2-202 (1964); NEB. REV. STAT. UCC § 2-202 (1964); NEV. REV. STAT. § 104.2202 (1967); N.H. REV. STAT. ANN. § 382A:2-202 (1961); N.J. REV. STAT. § 12A:2-202 (1962); N.M. STAT. ANN. § 50A-2-202 (1962); N.Y. UCC § 2-202 (McKinney 1964); N.C. GEN. STAT. § 25.2-202 (repl. vol. 1965); N.D. CENT. CODE § 41-02-202 (1965); OHIO REV. CODE ANN. § 1302.05 (Baldwin 1964); OKLA. STAT. ANN. tit. 12A, § 2-202 (1963); ORE. REV. STAT. § 72.2020 (1963); PA. STAT. ANN. tit. 12A, § 2-202 (1970); R.I. GEN. LAWS ANN. § 6A-2-202 (1961); S.C. CODE ANN. § 10.2-202 (1966); S.D. CODE § 57-3-4 (1969); TENN. CODE ANN. § 47-2-202 (repl. vol. 1964); TEx. Bus. & COMM. CODE § 2-202 (1968); UTAH CODE ANN. § 70A-2-202 (repl. vol. 1968); VT. STAT. ANN. tit. 9A, § 2-202 (1966); VA. CODE ANN. § 8.2-202 (1965); WASH. REV. CODE ANN. § 62A.2-202 (Supp. 1970); W. VA. CODE ANN. § 46-2.202 (1966); Wis. STAT. ANN. § 402.202 (1964); Wyo. STAT. ANN. § 34-2-202 (Supp. 1969). None of the jurisdictions listed above has enacted UCC § 2-202 in a form different than the official code. 5 See UNIFORM COMMERCIAL CODE (hereinafter UCC) § 1-102(2)(b). OUCC § 1-205 states: Course of Dealing and Usage of Trade (I) A course of dealing is a sequence of previous conduct between the parties to a particular transaction which is fairly to be regarded as establishing a common basis of understanding for interpreting their ex- pressions and other conduct. (2) A usage of trade is any practice or method of dealing having 1973] NOTES AND COMMENTS contract to be explained and supplemented by course of dealing8 and usage of trade9 as well as by evidence of consistent additional terms. While § 2-202 makes course of dealing and usage of trade freely admissi- ble when offered to explain and supplement the express terms of the written agreement,'" this section limits the admissibility of evidence of- fered to prove consistent additional terms.' Section 1-20512 then states the UCC's definitions of usage of trade and course of dealing as well as the criteria to be used by the trier of fact in determining the effect of such 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. The existence and scope of such a usage are to be proved as facts. If it is established that such a usage is embodied in a written trade code or similar writing the interpretation of the writing is for the court. (3) A course of dealing between parties and any usage of trade in the vocation or trade which they are engaged or of which they are or should be aware give particular meaning to and supplement or qualify terms of an agreement.