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CMA Foundation · Fundamentals of Business Laws and Business Communication · Primary and Subordinate Legislation

A trade association in a city has long followed a usage that a buyer may return goods within seven days. A newly enacted Central statute applicable to such sales expressly gives the buyer no right of return. A buyer relies on the usage. Which view is correct?

The usage cannot prevail, because custom cannot override an express statutory provision. Enacted law made by a competent legislature ranks above custom. Being older does not help the usage, trade associations cannot make binding law, and the buyer has no choice between conflicting sources.

  1. AThe usage cannot prevail because custom cannot override an express statutory provisionCorrect
  2. BThe usage prevails because it is older than the statute
  3. CThe usage prevails because trade associations can make binding law
  4. DThe usage and the statute apply equally and the buyer may choose

Explanation

Custom is a subordinate source and is valid only where it does not conflict with enacted law. Age of the usage does not give it priority over a statute. Trade associations have no law-making power, and a party cannot pick between conflicting sources.

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