Advice with an incidental device
Facts. A client hires a specialist to analyze operating problems and recommend a solution. The agreement centers on judgment and ongoing advice but includes delivery of a small diagnostic device; the invoice separately lists its cost. Apply the predominant-purpose test.
Analysis. The advisory undertaking supports services with incidental goods. The listed device cost is relevant but does not automatically govern the whole agreement; compare the contractual object, promised expertise and role of the device before choosing the rule.
The rule
Article 2 applies within its goods scope. For a mixed contract under Bonebrake's approach, examine whether the predominant purpose is goods with incidental labor or services with incidental goods. Software classification and other governing statutory questions need their own authority.
Elements
- The transaction and what was promised.
- Goods within 2-105 and the scope limits of 2-102.
- The governing test for a mixed transaction.
Exceptions and limits
- Labor alone does not exclude a goods sale.
- A price split is evidence rather than the whole predominant-purpose inquiry.
- Specht reserved Article 2 applicability for its download transaction.
When the issue arises
Equipment comes with installation, materials accompany professional work, or a software arrangement is described as a license. The classification can affect formation, modification, warranties and remedies.
What the goods definition includes
Section 2-105 focuses on movability at identification and includes specially manufactured goods. It excludes the payment money, investment securities and things in action, and contains provisions for future goods and identified portions of a bulk.
Section 2-102 excludes transactions intended only as security and preserves specified protective sales statutes. Calling a document a sale is therefore not enough to resolve every applicable law.
Read the mixed bargain as a whole under Bonebrake
In part II, Bonebrake treated the replacement bowling equipment as goods despite substantial installation work. The agreement's equipment language and the object of replacing property destroyed by fire mattered; labor in making goods usable did not categorically remove the transaction from Article 2.
The predominant-purpose analysis distinguishes services with incidental goods from a sale with incidental labor. Explain what the customer sought, what the supplier promised and how the contract describes the performance, using price allocations as evidence while explaining why no automatic percentage rule resolves the classification.
Do not convert one classification into a universal rule
Bonebrake supplies a particular mixed-contract approach, not proof that every jurisdiction resolves every hybrid contract identically. Identify the rule supplied by the problem or governing court before applying it.
Specht expressly reserved whether Article 2 governed its downloadable software transaction because common-law assent principles resolved the dispute. A software label alone does not justify attributing a universal goods holding to that decision.
Buying a machine with installation
Facts. A business orders a specified machine, with delivery and routine installation included in a total price. The agreement describes the sale of that equipment and installation as the way to make it usable. Apply Bonebrake's approach.
Analysis. The identified equipment and the object of acquiring it support a goods transaction with incidental labor. State why installation serves that sale; do not exclude Article 2 merely because the supplier uses technicians.
Leading cases
Compared with nearby doctrines
| Doctrine | How it differs |
|---|---|
| Contract modification | Classification determines whether Article 2 removes the consideration requirement, while other requirements remain. |
| Battle of the forms | A goods classification can make 2-207 the governing formation framework, displacing the common-law rule for a varying response. |
Common exam mistakes
- Treating any labor as excluding Article 2.
- Using the largest invoice line as the only classification fact.
- Calling every software license a goods sale based on Specht.
- Assuming Article 2 repeals all protective sales statutes.
Practice questions
A contract sells identified replacement equipment with installation to make it usable. Its language and commercial object concern acquiring that equipment. Applying Bonebrake's predominant-purpose approach, which is strongest?
Answer and explanations
Correct answer: A.
Authority: Bonebrake, part II: mixed goods and labor
- A. Correct. The contract's object and terms support goods with incidental labor under the stated approach.
- B. Wrong. Bonebrake rejected exclusion merely because substantial labor was involved.
- C. Wrong. The specified predominant-purpose test examines the transaction's purpose, not an automatic invoice split.
- D. Wrong. The court applies the governing commercial law; it does not transform the UCC into federal legislation.
More contracts practice questions and essays
Quick answers
Does substantial installation labor defeat a goods classification?
Not automatically under Bonebrake. The court asks the mixed transaction's predominant purpose, using the agreement and its object.
Does the device's price always decide a mixed contract?
No. Under a predominant-purpose analysis, explain the object and obligations; price allocation is evidence rather than a self-executing rule.
Did Specht classify all downloadable software as goods?
No. It reserved that question and resolved notice and assent under common-law principles.