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Governing law · complete doctrine guide

Common law, UCC Article 2, and mixed contracts

Before analyzing any contracts question, decide which body of law governs, because the answer changes the rules that follow. Common law governs contracts for services and interests in real estate, while Article 2 of the UCC governs contracts for the sale of goods, meaning movable, identified things rather than services, land, or intangible rights. A contract that mixes goods and services, such as an agreement to install a product along with the product itself, is ordinarily analyzed under the predominant-purpose test, which looks at the language of the contract, the nature of the supplier's business, the intrinsic worth of the materials involved, and the overall thrust of the transaction to decide which purpose actually dominates. Some courts instead use a gravamen approach that asks only which body of law governs the specific part of the transaction that caused the dispute, though the exam usually signals which method it wants applied.

TESTED STATUSCurrent MBE, MEE where applicable, and NextGen foundational doctrine
01 · COMPLETE FRAMEWORK

Black-letter propositions

  1. 01

    Goods are movable, identified things; services and interests in land are not goods.

  2. 02

    Predominant purpose considers contract language, supplier's business, intrinsic worth of materials, and the transaction's thrust.

  3. 03

    Some courts use a gravamen approach for the particular portion causing injury, but the exam usually signals the governing method.

  4. 04

    UCC rules can modify formation, terms, performance, and remedies, so governing law should be decided first.

02 · ORDER OF ANALYSIS

Use this attack sequence under time

1

Frame the issue

Classify the transaction and each promised performance.

2

Resolve the next checkpoint

Apply predominant purpose to the whole agreement unless instructed otherwise.

3

Finish the conclusion

State which body of law governs before applying formation or breach rules.

03 · DISTINCTIONS THAT CREATE POINTS

Common wrong turns

  • A tangible item supplied incidentally during a service does not necessarily convert the agreement into a sale of goods.
  • Software and specially manufactured items require attention to facts and the tested rule.
04 · WORKED APPLICATION

Worked example

A contractor agrees to design and install a custom heating system; most of the price pays for engineering and labor.

Model analysis

The predominant purpose is likely services, so common law governs despite transfer of equipment. The contract's language, price allocation, and supplier role support that conclusion.

05 · CLOSED-BOOK RETRIEVAL

Practice this topic

06 · FROM THE PRIMARY TEXT

What the Article 2 text sets as its scope

UCC 2-102 says that, unless the context otherwise requires, Article 2 applies to transactions in goods. It does not apply to a transaction that is in the form of an unconditional contract to sell or a present sale but is intended to operate only as a security transaction, and it does not impair or repeal statutes regulating sales to consumers, farmers or other specified classes of buyers. The uniform text is published by Cornell's Legal Information Institute, and each state adopts its own version.

UCC 2-105(1) defines goods as all things, including specially manufactured goods, that are movable at the time of identification to the contract for sale. It excludes the money in which the price is paid, investment securities and things in action. It includes the unborn young of animals, growing crops and other identified things attached to realty as described in 2-107.

07 · FROM THE PRIMARY TEXT

Why mixed contracts are their own question

The quoted text of 2-102 and 2-105 defines the article's scope by transactions in goods. It does not itself say how to treat a single agreement that mixes goods with services or real estate. That question is answered by the test your course uses, so state the test and apply it to the facts before choosing between the common law and Article 2.

The choice matters because Article 2 changes several common-law rules. For example, UCC 2-209(1) says an agreement modifying a contract within Article 2 needs no consideration to be binding, and 2-201 sets a $500 threshold for the statute of frauds for goods.

08 · QUICK ANSWERS

Frequently asked questions

What is the controlling rule for common law, ucc article 2, and mixed contracts?+

The predominant purpose of a mixed transaction determines whether common law or Article 2 governs, and that choice controls the remaining analysis.

When does UCC Article 2 apply?+

To transactions in goods, according to UCC 2-102, unless the context otherwise requires.

What are goods under UCC 2-105?+

All things, including specially manufactured goods, that are movable at the time of identification to the contract for sale, other than money, investment securities and things in action.

Does Article 2 apply to security transactions?+

No. UCC 2-102 excludes a transaction that is in the form of an unconditional contract to sell or a present sale but is intended to operate only as a security transaction.

Do growing crops count as goods?+

Yes. UCC 2-105(1) includes growing crops and the unborn young of animals, along with other identified things attached to realty as described in 2-107.

Does the UCC text tell me how to treat a mixed goods-and-services contract?+

Not in sections 2-102 and 2-105, which define scope by transactions in goods, so apply the test your course uses and state it in your answer.

SOURCE DESK

Primary sources

Cornell LII: Uniform Commercial Code Article 2 (Sections 2-102, 2-105, 2-209, 2-201)↗

Governing text for common law, ucc article 2, and mixed contracts

Uniform Commercial Code (Uniform Law Commission) ↗