In: Accounting
In Fallsview Glatt Kosher Caterers, Inc. v. Rosenfeld, why did it mattter whether the UCC, Article 2 applied? What test did the court use to determine if the UCC or the common law of Contracts applied? In your opinion, what was the most persuasive factor for applying the UCC?
PLAINTIFF, A catering company that organized Passover getaways, sued defendant for payment under an alleged agreement to provide accommodations for his family. Defendant denied the existence of any agreement, and argued that, as the retreat comprised goods over $500, absence of a written agreement precluded a claim under the Uniform Commercial Code’s statute of frauds. Presented with a hybrid sales-services contract, the court used a “predominant purpose” analysis to determine whether the statue of frauds applied. Defendant contended that people attended such programs primarily to eat Kosher food (goods), while plaintiff maintained that the retreat revolved around activities and religious lectures (services). After reviewing the characteristics of the all-inclusive retreat, the court concluded that the essence of the experience was defined by services. Thus, defendant’s motion to dismiss was denied and plaintiff was permitted to pursue its claim.
It mattered significantly if the UCC, Article 2 code applied because under UCC 2-201 any contract for the sale of goods worth $500 or more can become enforced only in writing and signed. In this case it mattered if Fallsview were offering goods or services for that law to apply. The test that the courts used to determine if the UCC or common law of contractsapplied were to identify what would be considered a “good” or “service.” In my opinion, the most persuasive factor of applying the UCC was that even though there wasn’t a governed contract between Fallsview and Rosenfeld, the agreement of services made it enforceable between both parties