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LSDefine
Simple English definitions for legal terms
course of trade
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A quick definition of course of trade:
A course of trade refers to the customary practices and methods of dealing within a specific profession or business. It is a well-known and uniform practice that people are accustomed to doing. Trade usage is a type of course of trade that has such regularity of observance in a region, vocation, or trade that it justifies an expectation that it will be observed in a given transaction. It is a customary practice or set of practices relied on by persons conversant in, or connected with, a trade or business.
A more thorough explanation:
Definition: Course of trade refers to the customary practices and methods of dealing within a specific profession or business. It includes trade usage, which is a well-known and uniform practice within a particular trade or region that justifies an expectation that it will be observed in a given transaction.
Examples:
- Trade usage: In the construction industry, it is customary to pay a deposit before work begins and the remaining balance upon completion of the project. This trade usage justifies an expectation that these payment terms will be observed in a given construction contract.
- Local usage: In a particular city, it may be common practice for landlords to include utilities in the rent price. This local usage may be considered by a court when interpreting a lease agreement.
- General usage: Throughout the United States, it is customary for businesses to be closed on major holidays such as Christmas and Thanksgiving. This general usage is not restricted to a local area and is widely observed.
These examples illustrate how course of trade and trade usage can establish customary practices and expectations within a particular profession or business. They can also be used to interpret contracts and agreements.