R2d § 203
Standards of Preference in Interpretation
In the interpretation of a promise or agreement or a term thereof, the following standards of preference are generally applicable: (a) an interpretation which gives a reasonable, lawful, and effective meaning to all the terms is preferred to an interpretation which leaves a part unreasonable, unlawful, or of no effect; (b) express terms are given greater weight than course of performance, course of dealing, and usage of trade, course of performance is given greater weight than course of dealing or usage of trade, and course of dealing is given greater weight than usage of trade; (c) specific terms and exact terms are given greater weight than general language; (d) separately negotiated or added terms are given greater weight than standardized terms or other terms not separately negotiated.
Professor's notes
Elements (preferences in interpretation): (a) an interpretation giving reasonable, lawful, and effective meaning to all terms is preferred over one leaving a part unreasonable, unlawful, or no effect; (b) express terms beat course of performance beat course of dealing beat usage of trade; (c) specific terms beat general terms; (d) separately negotiated or added terms beat standardized terms.
These are the canons of construction in priority order. (b) is the hierarchy that matters most: express > performance > dealing > usage.
Common misunderstanding: students invoke usage of trade to override express text. § 203(b) blocks that move. Usage can supplement and explain, but where express terms conflict with usage, express terms win. The exception is the Nanakuli-style argument that the parties incorporated the trade usage as the express term's meaning: but that requires evidentiary work.
Text
R2d § 203. Standards of Preference in Interpretation.
In the interpretation of a promise or agreement or a term thereof, the following standards of preference are generally applicable:
(a) an interpretation which gives a reasonable, lawful, and effective meaning to all the terms is preferred to an interpretation which leaves a part unreasonable, unlawful, or of no effect;
(b) express terms are given greater weight than course of performance, course of dealing, and usage of trade, course of performance is given greater weight than course of dealing or usage of trade, and course of dealing is given greater weight than usage of trade;
(c) specific terms and exact terms are given greater weight than general language;
(d) separately negotiated or added terms are given greater weight than standardized terms or other terms not separately negotiated.