When an indivisible contract involves both the delivery of goods and the rendering of services (a mixed contract), which statement is TRUE?

• A. The common law always applies to the entire contract.
• B. The UCC always applies to the entire contract.
• C. The common law always applies to issues stemming from the delivery of services, and the UCC always applies to issues dealing with the delivery of goods.
• D. The predominant purpose rule applies to determine whether the contract is governed by the UCC or the common law.

Answer: (D)

In mixed contracts where both goods and services are involved and the contract cannot be separated into two independent agreements, the governing law is decided by the predominant purpose of the contract. The predominant purpose rule looks at whether the contract’s main objective is the sale of goods or the rendering of services. If the dominant aim is to obtain goods, the UCC applies; if the dominant aim is to obtain services, the common law applies. This approach prevents automatically applying one set of rules to the entire agreement and aligns the law with what the contract was primarily intended to accomplish. The other statements are too rigid—they imply one body of law always governs, which isn’t accurate; the determination hinges on which aspect dominates, hence the need for the predominant purpose rule.