What type of evidence best explains industry practice used to interpret timing obligations for deliveries in a contract?

• A. Parol evidence
• B. Usage of trade
• C. Course of performance
• D. Course of dealing

Answer: (B)

The main idea is that industry practice is interpreted through usage of trade. When the contract doesn’t spell out exact delivery timing or leaves it ambiguous, evidence of the customary practices in the relevant industry helps determine what the parties and the market expect. Usage of trade reflects the standard way deliveries are timed in that field and provides an objective benchmark for interpretation, rather than relying solely on the particular parties’ past interactions or performance under this contract.

This differs from course of dealing, which looks at how the parties previously handled similar transactions with each other, and course of performance, which focuses on how the current contract has been performed so far. Those can be informative, but they are narrower in scope or specific to the parties involved, whereas usage of trade captures the common industry-wide norm for timing deliveries.