UCC § 2-208

Section 2-208 governs course of performance — the sequence of conduct between parties to the particular contract at issue, not prior contracts (that is course of dealing under § 1-205). Subsection (1): any course of performance accepted or acquiesced in without objection is relevant to determine the meaning of the agreement. Subsection (2): express terms, course of performance, course of dealing, and usage of trade are to be construed as consistent with each other where reasonable; where not, express terms control over course of performance, which controls over course of dealing, which controls over usage of trade.

The doctrinal move is to make the parties' own behavior under the contract evidence of what they meant by it. If a seller accepted late payments six times without objection, that course of performance may defeat a later claim that the contract required timely payment. Section 2-208 reflects the UCC's preference for enforcing what the parties actually practiced over what the document literally says.

Paradigm: A and B have a one-year supply agreement. In months one through five, B pays 10 days late and A accepts without complaint. In month six, A claims breach for late payment. Under § 2-208, the course of performance is relevant to what the agreement required; B argues that the prior acceptances modified or interpreted the timing term. A must have objected seasonably to preserve her right to demand strict performance.

Students often confuse the three behavioral-context concepts: course of dealing (prior contracts, § 1-205), course of performance (this contract's history, § 2-208), and usage of trade (industry practice, § 1-205). The hierarchy in § 2-208(2) is the practical payoff: when they conflict, later-formed, more-specific context wins. Express terms beat course of performance; course of performance beats course of dealing; course of dealing beats trade usage.

Connect to UCC § 1-205 (course of dealing and usage of trade), the Nānākuli Paving v. Shell Oil materials in Chapter 16 (the canonical case on usage supplementing express terms), and R2d § 202(4)-(5) (course of dealing and usage as interpretive tools). The teacher's manual pairs § 2-208 with § 1-103 to reinforce that the UCC's behavioral context rules supplement rather than displace common law interpretation.