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Trade Usages and Implied Terms in the Age of Arbitration$
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Fabien Gélinas

Print publication date: 2016

Print ISBN-13: 9780199916016

Published to Oxford Scholarship Online: May 2016

DOI: 10.1093/acprof:oso/9780199916016.001.0001

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Usages and Implied Terms in the United States

Usages and Implied Terms in the United States

(p.103) Chapter 6 Usages and Implied Terms in the United States
Trade Usages and Implied Terms in the Age of Arbitration

Christopher R. Drahozal

Oxford University Press

The UCC’s incorporation strategy, using usage of trade, course of performance, and course of dealing to interpret and fill gaps in the parties’ contract, is central to U.S. law on usages and implied terms. This chapter discusses the origins of the incorporation strategy in Karl Llewellyn’s legal realist views. It then describes the implementation of the incorporation strategy through the UCC’s definitions of agreement and course of performance, course of dealing, and usage of trade; its provisions setting out the legal effects of those commercial practices; its requirements of commercial reasonableness; and its implied duty of good faith and fair dealing. Next, the chapter examines the extent to which parties can contract out of the UCC’s incorporation strategy and the influence of the incorporation strategy on the common law. It concludes with an overview of academic criticisms and defenses of the incorporation strategy, emphasizing empirical evidence.

Keywords:   contract interpretation, United States, usages, UCC, incorporation strategy, gap-filling, uniform law, legal realism

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