California Commercial Code Section 1303

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(a) A "course of performance" is a sequence of conduct
between the parties to a particular transaction that exists if:
   (1) the agreement of the parties with respect to the transaction
involves repeated occasions for performance by a party; and
   (2) 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.
   (b) A "course of dealing" is 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.
   (c) A "usage of trade" is 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.  The existence and scope of such a usage
must be proved as facts. 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.
   (d) A course of performance or course of dealing between the
parties or usage of trade in the vocation or trade in which they are
engaged or of which they are or should be aware is relevant in
ascertaining the meaning of the parties' agreement, may give
particular meaning to specific terms of the 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.
   (e) Except as otherwise provided in subdivision (f), 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:
   (1) express terms prevail over course of performance, course of
dealing, and usage of trade;
   (2) course of performance prevails over course of dealing and
usage of trade;
   (3) course of dealing prevails over usage of trade.
   (f) Subject to Section 2209, a course of performance is relevant
to show a waiver or modification of any term inconsistent with the
course of performance.
   (g) 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.

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Last modified: July 31, 2008