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designing, and installing goods), then this fact supports finding the transaction to be one for the sale of goods—even if some service element often accompanies the sales. [ Audio Visual Artistry v. Tanzer , 403 S.W.3d 789 (Tenn. 2012).] What the Purchaser Bargained to Receive as a Factor in the Predominant- Purpose Test A key factor in the predominant-purpose test is the final product that the purchaser sought to receive by entering the contract. If that final product is a service, then the contract is more likely one for services. Conversely, if that final product is goods, then the contract is more likely a sale of goods. The buyer’s main purpose in entering the contract is determined from the perspective of a reasonable person. That is, this factor asks what a reasonable person would believe to be the buyer’s main purpose in entering the contract, considering the contractual language and the surrounding circumstances. [ See Audio Visual Artistry v. Tanzer , 403 S.W.3d 789 (Tenn. 2012).] The Amount Charged for Goods v. the Amount Charged for Services as a Factor in the Predominant-Purpose Test Many hybrid contracts will itemize the amount charged for goods and that charged for services. If the amount charged for goods exceeds that charged for services, then this fact supports finding the contract to be one for the sale of goods. On the other hand, if the charge for services exceeds that for goods, the contract is (all other things equal) more likely one for services. [ See Audio Visual Artistry v. Tanzer , 403 S.W.3d 789 (Tenn. 2012).] Examples : (1) A homeowner and retailer contracted for the retailer to install a computerized entertainment system in the home. The contract made numerous references to “equipment,” “product,” “goods,” and “delivery of goods.” Further, the itemized price for the system itself was $80,000; the cost of installation and like services was only $10,000. The retailer specialized in providing entertainment systems, along with installation and maintenance. On similar facts, an appellate court found that UCC Article 2 governed under the predominant-purpose test. What the homeowner ultimately bargained for was the entertainment system, which consisted of goods. Any installation or other services were incidental to that end. The contract used many terms indicative of goods, and the main thrust of the retailer’s business was to provide entertainment systems. Finally, the contractual cost of services ($10,000) was a mere fraction of the cost of the goods ($80,000). [ See Audio Visual Artistry v. Tanzer , 403 S.W.3d 789 (Tenn. 2012).]
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