UCC vs Common Law for Bar Exam Contracts Questions

Overview

Many contracts questions become easy once you classify the transaction correctly. This page turns UCC-versus-common-law sorting into a repeatable first move before you analyze formation, modification, or remedies.

When UCC Applies

The FIRST question on any contracts essay: Does UCC Article 2 or common law apply? This determines almost everything else.

GOODS = tangible, movable personal property at the time of identification to the contract. Cars, furniture, food, livestock, crops when severed = GOODS. Services, real estate, intellectual property = NOT goods (common law).

THE PREDOMINANT PURPOSE TEST for mixed transactions: Ask: What is the MAIN PURPOSE of the contract? - Contract to buy a furnace with installation → UCC (furnace is main purpose) - Contract for house painting that includes paint → Common law (service is main purpose) - Restaurant meal → UCC in most jurisdictions (food is the product)

MERCHANTS matter a lot under the UCC. A merchant is someone who: (1) Deals in goods of the kind, OR (2) Holds themselves out as having special knowledge about the goods

Many UCC rules only apply to merchants (firm offers, merchantability warranty, risk of loss rules).

HYPO: HomeOwner hires ContractorCo to build a custom deck for $15,000. The contract includes $5,000 in lumber and materials (supplied by ContractorCo) and $10,000 in labor.

ANALYSIS: Is this UCC or common law?

Apply the PREDOMINANT PURPOSE TEST: - Total contract: $15,000 - Goods (lumber/materials): $5,000 (33%) - Services (labor): $10,000 (67%)

The PRIMARY PURPOSE is the SERVICE of building the deck. The materials are incidental to achieving that purpose. You're not really buying lumber—you're buying a deck-building service.

RESULT: COMMON LAW applies. Even though goods are involved, the predominant purpose is services.

This matters because: If ContractorCo does a "pretty good" job but not perfect, substantial performance doctrine (common law) applies—they can still recover, minus damages. Under UCC's perfect tender rule, buyer could reject for any defect.

• Trigger: Sale of GOODS (tangible, movable personal property)
• Representative examples: Selling a car = UCC, Painting a house = common law (service), Custom software = depends on jurisdiction

Section sources

Primary law and source anchors

• UCC Section 2-201 The Statute of Frauds for goods priced at $500 or more, including merchant-confirmation mechanics.
• UCC Section 2-207 Formation and additional-term rules for battle-of-the-forms disputes between merchants.
• Restatement (Second) of Contracts Section 24 Core definition of an offer and the power of acceptance.