Legal Definitions - usage

In a legal context, usage refers to a consistent and widely accepted practice or custom within a particular industry, profession, or geographic area. It describes how things are typically done, rather than a formal written rule or law. These established practices are so common and well-understood that parties involved in a transaction or agreement are often presumed to be aware of them and to have incorporated them into their dealings, even if not explicitly stated. Courts may consider usage to interpret ambiguous contract terms, fill gaps in agreements, or determine the reasonable expectations of parties.

Here are some examples illustrating the concept of usage:

• Construction Industry Practice: Imagine a contract between a general contractor and a subcontractor for a commercial building project. The contract specifies "standard grade lumber." In the local construction industry, there's a well-known usage that "standard grade lumber" allows for minor variations in wood grain or small, non-structural knots, as long as the lumber's integrity and fitness for purpose are not compromised. If the general contractor later objects to these minor imperfections, the subcontractor could argue that the delivered lumber meets the established usage of "standard grade" within their trade, thereby fulfilling the contract's requirement based on common industry practice.

• International Shipping Terms: A company in the United States orders a large shipment of specialized machinery from a manufacturer in Germany. Their contract states "payment upon delivery." In the international shipping industry, there's a common usage that "payment upon delivery" actually means payment within 30 days of the goods arriving at the destination port, allowing time for customs clearance, inspection, and processing. If the German manufacturer demands immediate payment the moment the ship docks, the U.S. company could invoke this widely recognized usage to explain their expectation of a 30-day payment window, which is a standard practice in their shared trade.

• Software Development Agreements: A small business hires a software development firm to create a custom mobile application. The contract outlines the features and deliverables but doesn't explicitly mention who owns the intellectual property rights to generic code libraries or development tools used in the project. In the software development industry, there's a common usage that while the client owns the final custom application, the development firm typically retains ownership of reusable code libraries and foundational tools they developed independently, which are then licensed for use within the client's application. This usage helps clarify intellectual property rights even when the contract is silent on these specific details, reflecting the customary practice in the field.