Opinion ID: 1060029
Heading Depth: 1
Heading Rank: 1

Heading: Admissibility of Evidence Concerning Trade Custom and Usage

Text: Westmoreland argues that it should have been permitted to introduce evidence showing that the terms `Capacity Purchase Price' and `Forced Outage Day' have special meaning in the trade custom and usage, under which the occurrence of such Days does not diminish the monthly payment unless the annual Forced Outage Day allowance is exceeded. Westmoreland submits that [t]his trade custom and usage, reflected in all of the contracts resulting from the 1988 solicitation, `form a part [of the Contract] ... unless the terms of the writing [clearly exclude] the usage or custom.' (Quoting Walker v. Gateway Milling Co., 121 Va. 217, 224, 92 S.E. 826, 828 (1917)). Westmoreland maintains there is no language in the Contract that clearly excludes consideration of custom and usage. Noting that the trial court excluded the evidence of trade custom and usage because it found the Contract unambiguous, Westmoreland cites Doswell Ltd. Partnership v. Virginia Electric & Power Co., 251 Va. 215, 468 S.E.2d 84 (1996), for the proposition that such evidence is admissible to show that contract phrases or terms have acquired a peculiar meaning by trade custom or usage even though the phrases or terms themselves are unambiguous. Id. at 225, 468 S.E.2d at 90. Hence, Westmoreland concludes, the trial court erred in excluding its evidence of trade custom or usage. While we confirm what we said in Doswell, we disagree with Westmoreland. In our opinion, Westmoreland has not met the threshold requirement for admission of the disputed evidence. In Walker, supra, we said that evidence of trade usage is proper to permit the jury to consider the situation of the parties and the circumstances leading up to the making of the contract for the purpose of determining whether the usage in question operated upon the minds of the parties in using the language which was employed in the contract. 121 Va. at 226, 92 S.E. at 829 (emphasis added). However, knowledge of the existence of the custom must be brought home to the [contracting parties], unless the evidence shows that it is so uniform and notorious at the place where the parties to be affected by it reside, as to raise a prima facie presumption that they knew of it. Bowles v. Rice, 107 Va. 51, 55, 57 S.E. 575, 577 (1907). Because the Contract and the other agreements resulting from the 1988 solicitation were made at or about the same time, what was done under the other contracts could not possibly have been brought home to, or have operated upon the minds of, the parties to the Westmoreland contract at the time of its execution. In other words, Westmoreland has failed to establish the existence, at the time the Contract was executed, of any trade custom or usage relevant to the meaning of the language that was employed in the Contract. The trial court did not err, therefore, in excluding evidence of trade custom and usage.