1. Facts of the case 2. What is the issue? 3. Analysis 403 S.W.3d 789 (Tenn. App
ID: 398215 • Letter: 1
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1. Facts of the case 2. What is the issue? 3. Analysis 403 S.W.3d 789 (Tenn. App. 2012) Audio Visual Artistry v. Tanzer Audio Video firm offers what it calls and phonefinte smart-home system in Tanzer's large home, which was then being const oArtistry (AVA) is a residential entertainment and communications firm specializing in custom desi smart-home" systems, which include home theater, muli-room music and teleionsTh rcom components. AVA and Stephen Tanzer entered into a contract under which AVA was to sell cn The ystem contemplated by the parties contract would allow Taner to play music in seven independenty controlled muesi total would span 13 rooms of the home Remode control "ouch-panels" would control and integrae DVD, televtsion other smar-home functions. In addition, he contract called for an automated lighing system and an intercom/phone house hole Labor understanding that Tanzer's needs and se nenworking system. The contract price of $71.915 included this breakdown of categories: Equipment: $56,375.00 Programming:$9,880.00, and Cable Misc. Parts:$$,660.00. The contract also rnefected an u desires for the audio system would likely evohe as construction ofhis home progressed, that AVA would accommodate such nee desines, and that the contract price would be increased if AVA took on additional work in accordance with Tanzer'snew During the time AVA was performing work called for by the contract (including additional work requested by Targer parties became invohved in disputes over what was to be done, over the amounts of adjustments to the contractp the quality of AVA's work. Tanzer fired AVA and retained another firm to complete the work. AVA then sued Tanzer for contract. AVA sought payment of portions of the contract price that Tanzer had not paid Tanzer counterclaimed the theory that AVA had breached its obligations under the contract. The trial cour ruled in favor of AVA. Applying remedies and other provisions set forth in the Uniform Commercial Code (UCC) but allowing a partial offset in recognition that claim had some merit as well the court entered judgment in AVA's finor in the amount of $36,580. Tanzer appealed to the 1T see Court of Appeals. He argued, mong other things,that the trial court erred in applying the UCC instead of the common la against AVA on objective of the parties' agreement or the primary or overall Tanzer asserts that the trial court erred in applying UCC Article purpose of the transaction. Ordinarily, a court determine Stafford, Judge whether a mixed contract for goods and services is subject o Article 2 by considering whether the contract, reasonably stated, is for goods with labor incidentally involved or for ser convices with goods incidentally involved. The question is gener- ally one of fact, involving a consideration of the contract in contract principles apply is important in terms of available war. tion is predominantly for the sale of goods or the rendition of ranties and the measure of damages. We begin our analysis with services, Article 2 applies to the entire contract or not at all 2 to his contract with AVA. Specifically, Tanzer argues that the thrust of the contract is for services and not for the sale of goods. Therefore, according to Tanzer,] common-law breach of tract principles apply Thequestion of whether [Uprovisions orco mon-law its entirety. Depending upon whether theo ntract ortra 67 Am. Jur. 2d Sales 37. That treatise states the following One of the earliest cases to adopt the predominant purpose Article 2 [of the UCC] applies to transactions in goods but test was Bonebrake w. Cox, 499 R2d 951 (8th Cir. 1974), whic does not apply to... However, the existence of a sale in and of itself does not au- bowling equipment. The Bonebrake court noted that contracts for the rendition of services. involved a contract for the sale and installation of pre- tomaticall impliate the UC In many cases, a contraet or transaction may involve both the rendition of services, presenting a "mixed" or hybrid trans- action or contract. To determine whether such "mixed" or hybrid" contracts are governed by Article 2, a court must ex amine the whole transaction and look to the essence or main contracts are legion and then proposed its test: The test for r but granting that they are mixed, whether their predomina tor, their thrust, their of service, with goods incidentally involved (e inclusion or exclusion is not whether they are mixed or purpose, reasonably stated, is the rendito artist for painting), or is a transaction of sale, with labor incio ally involved (e.g, installation of a water heater in a bathroom You will learn about such matters in subsequent chapters.Explanation / Answer
Facts of the case:
Tanzer contacted with audio for the installation of smart home system. Audio submitted a proposal for components, parts and installation. Due to some construction at audio’s home construction could not start until March 2006.tanzer fired audio based upon audio’s stamen that the all the process would take less than three months. Even after using it for 15 months tanzer claimed that the system has some functionality problems. Audio delivered its invoice for about $120,000, of which just over $43,000 was outstanding. Tanzer disputed the amount and audio sued for breach of contract. Thus Disputes arose and Tanzer fired audio and contracted a new company. Audio sued for breach of contract.
Issue.
The main issue was that the UCC should not apply to the transaction. For the purpose of this the court considered the language of the contract; the nature of the business of the supplier of goods and services; the reason the parties entered into the contract, and the amounts paid for the rendition of the services and goods, respectively.
Analysis:
Tanzer’s appeal was rejected and court found that all factors weighed in favor of treating the transaction as a sale of goods covered by the UCC's Article 2.
Conclusion:the trial court awarded damages of about $35,000 to audio. The Tennessee court has applied the predominant purpose test and affirmed the trial court decision.
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