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Distinguishing Goods and Services Contracts

This lesson covers rules courts have fashioned to distinguish contracts for the sale of goods, to which Article 2 applies, from services contracts, to which the common law of contracts applies, and explains the common law’s role in interpreting Article 2.


In this lesson we’ll discuss an important exclusion from Article 2’s scope, service contracts. Article 2 doesn’t apply to contracts for services. Instead, these transactions are governed by the common law of contracts. However, many contracts involve both the provision of services and the sale of goods.

Two tests are used to determine whether Article 2 or the common law governs one of these hybrid contracts—the predominant-purpose test and the gravamen-of-the-action test.

I. Predominant-Purpose...