Ark. Code Ann. § 4-1-303 (2026)
Course of performance — Course of dealing — Usage of trade
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A “course of performance” is a sequence of conduct between the parties to a particular transaction that exists if:
- the agreement of the parties with respect to the transaction involves repeated occasions for performance by a party; and
- 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.
- 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.
- 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.
- 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.
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Except as otherwise provided in subsection (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:
- express terms prevail over course of performance, course of dealing, and usage of trade;
- course of performance prevails over course of dealing and usage of trade; and
- course of dealing prevails over usage of trade.
- Subject to § 4-2-209, a course of performance is relevant to show a waiver or modification of any term inconsistent with the course of performance.
- 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.
History. Acts 2005, No. 856, § 16.
Research References
Ark. L. Rev.
Uniform Commercial Code — Course of Dealing and Usage of Trade, 20 Ark. L. Rev. 388.
U. Ark. Little Rock L.J.
Adams, “Clear Title” for Farm Products: Congress and the Arkansas Legislature Attempt to Solve a Troublesome Problem, 10 U. Ark. Little Rock L.J. 619.
Case Notes
Course of Dealing.
Previous small contracts could not form the basis for a jury determination as to a “course of dealing” as to a large contract. Capital Steel Co. v. Foster & Creighton Co., 264 Ark. 683, 574 S.W.2d 256 (1978) (decision under prior law).
Evidence did not establish a course of dealing which would apply to disclaimer provisions in purchase agreement. Wilson v. Marquette Elecs., Inc., 630 F.2d 575 (8th Cir. 1980) (decision under prior law).
In the dealer's action against the bank for breach of contract to provide financing, where a bank provided recourse financing to a car dealer for 20 years, during that time had executed contracts establishing the terms for such financing and, though not provided in the contract, had always provided a delinquency list to the dealer, evidence that the bank had regularly provided the delinquency lists was admissible to show the previous conduct between the parties because that course of conduct could be regarded as establishing a common base of understanding for interpreting their expressions and other conduct. Bank of Am., N.A. v. C.D. Smith Motor Co., 353 Ark. 228, 106 S.W.3d 425 (2003) (decision under prior law).
Usage of Trade.
Where the evidence did not indicate that the buyer was the type of party who was or should be aware of the industry's trade customs, since it was entering a market in which it was relying on seller's expertise, the district court was not clearly erroneous in finding seller's implied warranties were not effectively disclaimed. Wilson v. Marquette Elecs., Inc., 630 F.2d 575 (8th Cir. 1980) (decision under prior law).
Trial court's determination that the course of dealing in the used-car trade was that a seller would reimburse the buyer when the seller could not deliver clear title to the vehicle was supported by the evidence and public policy, and fell within the definitions of trade usage and good faith in this section and § 4-1-201(b)(20). Therefore, a seller of a vehicle with an encumbered title was required to reimburse the buyer even though the seller was itself a good faith purchaser. Superior, Inc. v. Arrington, 2009 Ark. App. 875 (2009).