What You'll Learn

  • What each body of law covers
  • The predominant-purpose test
  • Why the choice changes the result
  • Hybrid and digital transactions
  • Exam method

Educational information only; not legal advice. This article is a general study aid and should be checked against current authority and course materials.

1. Start with the Subject Matter

Body of law Core coverage Typical examples

Common law Services, land, employment, and transactions not governed by Article 2. Construction labor, consulting, real-estate sale, personal services.

UCC Article 2 Contracts for the sale of goods - movable, tangible items. Cars, furniture, machines, inventory, manufactured products.

The UCC is designed to promote commercial reasonableness, flexibility, and uniformity. It often supplies gap-fillers for price, delivery, and time when the parties intended to contract and there is a reasonably certain basis for a remedy. The quantity term usually remains essential, although output and requirements formulas can satisfy it.

2. Mixed Transactions: Apply the Predominant-Purpose Test

A single deal may combine goods and services. Installation, design, maintenance, software, or training may accompany a tangible product. The traditional approach asks whether the transaction is predominantly a sale of goods or predominantly a service contract.

● Contract language: does the agreement describe a sale, work, labor, design, or services?

● Supplier’s business: is the provider mainly a manufacturer, merchant, contractor, consultant, or professional? ● Relative value and billing: how much of the price is tied to the goods compared with labor or services? ● Final product: is the buyer chiefly obtaining an item or the provider’s skill and judgment?

Key Takeaway

The outline treats BMC Industries v. Barth Industries as a predominant-purpose case. No single fact controls; language, billing, allocation of costs, and the nature of the final product are assessed together.

3. The Governing Law Changes the Analysis

Issue Common-law approach UCC approach

Open terms Greater concern with definiteness and material terms. A contract may survive open terms if intent and a remedy basis exist.

Acceptance Mirror-image rule: a changed term usually creates a counteroffer. Section 2-207 may recognize acceptance despite additional or different terms.

Modification New consideration is ordinarily required, subject to exceptions. No new consideration is required if the agreed modification is made in good faith.

Quantity Depends on the transaction and certainty required. Quantity is generally essential, but output/requirements terms may work.

4. Hybrid Digital and Internet-of-Things Deals

The outlines flag modern products that depend on software or continuing services. A connected device may be tangible, yet its promised functionality may depend on subscriptions, updates, or data services. The traditional predominant-purpose factors still provide the starting point.

Key Takeaway

For an Internet-of-Things transaction, the materials propose asking whether the device can function as advertised without the accompanying software and services. Treat this as a structured way to discuss the hybrid nature of the deal, while clearly identifying the traditional predominant-purpose test.

5. Exam Method

1 Classify the promised subject matter: goods, services, land, or a hybrid. 2 For a hybrid, apply every predominant-purpose factor rather than announcing a result from price alone. 3 State the governing law before discussing offer, acceptance, modification, warranties, or breach. 4 If the result is close, explain how the outcome could change under the other body of law.

Key Takeaway

A manufacturer sells a $30,000 industrial scanner and charges $4,000 for installation and training. The contract repeatedly calls the device the “product,” itemizes the scanner separately, and treats installation as incidental. Goods predominate, so Article 2 is the stronger answer.

Common Mistake

Do not apply the UCC merely because money changed hands, and do not call software or labor “goods” without analysis. Also remember that a service attached to a product does not automatically convert the entire transaction into common law.

Primary Authorities

  • ● U.C.C. §§ 2-102, 2-105, 2-204, 2-206, 2-207, 2-209, and 2-306.

  • ● BMC Industries, Inc. v. Barth Industries, Inc. (predominant-purpose analysis).

  • ● Southwest Engineering Co. v. Martin Tractor Co. (open terms and a reasonably certain remedy basis).

Exam-ready conclusion

Choose the governing law first. Common law usually governs services and land; Article 2 governs sales of goods; mixed deals require the predominant-purpose analysis. That choice determines the formation and performance rules that follow.