41-01-15. (1-301) Territorial applicability - Parties' power to choose applicable law.
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/nd/title-41/chapter-41-01-general-provisions/41-01-15·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
1. Except as provided hereafter in this section, when a transaction bears a reasonable
relation to this state and also to another state or nation the parties may agree that the
law either of this state or of such other state or nation shall govern their rights and
duties. Failing such agreement, this title applies to transactions bearing an appropriate
relation to this state.
2. If one of the following provisions of this title specifies the applicable law, that provision
governs and a contrary agreement is effective only to the extent permitted by the law,
including the conflict of laws rules, so specified:
a. Rights of creditors against sold goods. Section 41-02-47.
b. Applicability of the chapter on leases. Sections 41-02.1-05 and 41-02.1-06.
c. Applicability of the chapter on bank deposits and collections. Section 41-04-02.
d. Governing law in the chapter on funds transfers. Section 41-04.1-38.
e. Letters of credit. Section 41-05-16.
f. Applicability of the chapter on investment securities. Section 41-08-10.
g. Law governing perfection, the effect of perfection or nonperfection, and the
priority of security interests and agricultural liens. Sections 41-09-21 through
41-09-27.
h. Governing law in the chapter on controllable electronic records. Section 41-12-07.
41-01-16. (1-302) Variation by agreement. 1. Except as otherwise provided in subsection 2 or elsewhere under this title, the effect of
provisions of this title may be varied by agreement. 2. The obligations of good faith, diligence, reasonableness, and care prescribed under
this title may not be disclaimed by agreement. The parties, by agreement, may
determine the standards by which the performance of those obligations is to be
measured if those standards are not manifestly unreasonable. If this title requires an
action to be taken within a reasonable time, a time that is not manifestly unreasonable
may be fixed by agreement. 3. The presence in certain provisions of this title of the phrase "unless otherwise agreed",
or words of similar import, does not imply that the effect of other provisions may not be
varied by agreement under this section.
41-01-17. (1-303) Course of performance - Course of dealing - Usage of trade. 1. A "course of performance" is a sequence of conduct between the parties to a particular
transaction that exists if:
a. The agreement of the parties with respect to the transaction involves repeated
occasions for performance by a party; and
b. The other party, with knowledge of the nature of the performance and opportunity
for objection to it, accepts the performance or acquiesces in the performance
without objection. 2. A "course of dealing" is a sequence of conduct concerning previous transactions
between the parties to a particular transaction that is fairly to be regarded as
establishing a common basis of understanding for interpreting their expressions and
other conduct. 3. A "usage of trade" is any practice or method of dealing having such regularity of
observance in a place, vocation, or trade as to justify an expectation that it will be
observed with respect to the transaction in question. The existence and scope of such
a usage must be proved as facts. If it is established that such a usage is embodied in
a trade code or similar record, the interpretation of the record is a question of law. 4. A course of performance or course of dealing between the parties or usage of trade in
the vocation or trade in which the parties are engaged or of which the parties are or
should be aware is relevant in ascertaining the meaning of the parties' agreement,
may give particular meaning to specific terms of the agreement, and may supplement
or qualify the terms of the agreement. A usage of trade applicable in the place in which
part of the performance under the agreement is to occur may be so utilized as to that
part of the performance. 5. Except as otherwise provided in subsection 6, the express terms of an agreement and
any applicable course of performance, course of dealing, or usage of trade must be
construed whenever reasonable as consistent with each other. If such a construction is
unreasonable:
a. Express terms prevail over course of performance, course of dealing, and usage
of trade;
b. Course of performance prevails over course of dealing and usage of trade; and
c. Course of dealing prevails over usage of trade. 6. Subject to section 41-02-16, a course of performance is relevant to show a waiver or
modification of any term inconsistent with the course of performance.
7. Evidence of a relevant usage of trade offered by one party is not admissible unless
that party has given the other party notice that the court finds sufficient to prevent
unfair surprise to the other party.