Usages, such as those of a trade, may be resorted to show the special meanings of words.
Plaintiff and defendant entered into a contract, whereby plaintiff would sell, and defendant would purchase, meat of a certain grade at a certain price. The contract also provided for a discount if the meat was not of the specified grade. A laboratory provided analysis certificates and their findings were final. Meat was delivered and paid for, with some amounts paid at the discounted price. Plaintiff brought an action claiming that there was a custom and usage of trade, well known to both plaintiff and defendant, as to the meaning of the terms used in the contract which meant that despite the figures stated on the analysis certificates, meat of the lower grade by the analysis certificate was actually payable at the higher rate. The Circuit Court sustained defendant's motion for judgment on the pleadings. The case was appealed to the Supreme Court of Oregon.
Was the decision of the Circuit Court proper where it was based on industry custom and usage of specific definitions of terms?
The court reversed the judgment of the lower court. The court found that plaintiff should have been allowed to bring in information of trade usage of the business in which both parties were engaged. Despite the plain meaning of the terms, the evidence should have been allowed to prove the meaning of such terms in relation to the contract.