LEGAL PRINCIPLE: EVIDENCE LAW – Evidence on Custom of Trade – Necessity of Pleading Custom Before Leading Evidence

This principle applies the fundamental rule that pleadings define issues and admissible evidence to the specific context of trade custom. Custom of trade refers to established practices, usages, or understandings within particular industries or business sectors that may supplement or modify written contracts. Examples include payment terms, quality standards, delivery practices, or commission calculations specific to an industry. To rely on trade custom, a party must: (1) specifically plead the existence of the custom; (2) plead its terms and how it applies to the dispute; and (3) plead how it affects their rights or obligations. Only then does the custom become an issue requiring proof. If custom is not pleaded, evidence about it is irrelevant to the pleaded issues and therefore inadmissible. The requirement to plead custom serves several purposes: (1) it gives notice to the opponent who may need to investigate and rebut the alleged custom; (2) it allows the opponent to plead in response (admitting, denying, or pleading alternative customs); (3) it defines what must be proved; (4) it prevents surprise at trial when the opponent is unprepared to address custom. Evidence of unpleaded custom “goes to no issue” because the pleadings did not put custom in controversy—the issues for trial are defined by the pleadings, and custom is not among them. Even if such evidence is mistakenly admitted, it cannot support the court’s decision because doing so would decide the case on an unpleaded basis, violating the rule that parties are bound by their pleadings. This principle is particularly important in commercial cases where parties may seek to introduce industry practices not contemplated in their written agreements—without pleading, such evidence cannot modify contractual obligations.