Concept explainers
Case summary: A person GH owns and operates OGE, an audit entertainment establishment. The person GH signed a work order authorizing the company TCG to create a prototype of a customer chat system at a price of $64,697. Further, he signed an additional work order related to the installation of a customized firewall system with the same company at a price of $12,943. The payment of the money was to be done in monthly installments. Due to some problems, the work was not completed within the time anticipated. Also, the person GH was not able to make timely payments. The company TCG threatened the person GH to cease the work and filed a case regarding breach of contract. The person GH, instead of making further payments, wished to abandon the project.
To find: Whether the decision of the court regarding the transaction between the person GH and the company TCG was covered by UCC (Uniform Commercial Code), and the reason behind it.
Explanation of Solution
The Uniform Commercial Code (UCC) refers to a set of laws that governs all the commercial transactions related to goods across the United States. There are goods that require some related services such as design, installation, or assembly, but that does not mean that the buyer is purchasing the service rather than the good. The main focus is on the objective of the buyer. The service should be incidental to the purpose of the buyer to fall under the UCC. In the given case, the court would decide that the transaction between the person GH and the company TCG falls under the UCC. This is so because the service that the company TCG is providing to the person GH is incidental to the person GH’s objective of acquiring an operational website.
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