Hybrid Transactions and the INTERNET of Things: Goods, Services, or Software?

By Elvy, Stacy-Ann | Washington and Lee Law Review, January 1, 2017 | Go to article overview

Hybrid Transactions and the INTERNET of Things: Goods, Services, or Software?


Elvy, Stacy-Ann, Washington and Lee Law Review


Table of Contents

I. Introduction ...................................................................... 78

II. The Complexity of Hybrid IOT Transactions ................... 91

A. Mechanics of Hybrid IOT Transactions ..................... 91

B. Distinctions Between IOT and Other Hybrid Transactions ................................................... 97

III. The Inadequacy of Current Approaches in the IOT Era ............................................................................104

A. Services and Goods under Article 2 ..........................104

1. Predominant Purpose Test ..................................105

2. Gravamen of the Claim Test ...............................112

B. Service Contracts and Other Sources of Law ...........114

1. Common-Law Warranties....................................114

2. Federal Warranty Act ..........................................119

C. Software and Goods Under Article 2 .........................125

D. Software and Other Sources of Law ..........................135

IV. Proposals ..........................................................................142

A. Products Approach.....................................................143

B. Functionality Approach .............................................147

C. Article 9's Embedded Approach ................................164

D. Exclusionary Approach ..............................................168

V. Conclusion ........................................................................170

I. Introduction

The uniformity of state laws has numerous benefits including promoting predictability and stability, and the elimination of extant legal principles in favor of more efficient and adaptable rules.1 With the goals of uniformity and modernization in mind, Karl Llewellyn and others began drafting the Uniform Commercial Code (UCC).2 Today, the UCC is the primary source of commercial law in the United States. The code was created to reduce contrasting state approaches to commercial law.3 Thus, the UCC was intended to make uniform, simplify, clarify and modernize state laws on commercial transactions.4

Article 2 of the UCC (Article 2) governs transactions in goods.5 However, despite the goals of certainty and uniformity, one of the thorniest issues in sale of goods transactions is how best to determine whether Article 2 applies to transactions involving the provision of goods and non-goods, such as services or software.6 Courts have historically struggled to determine whether Article 2 applies to these types of hybrid transactions and they continue to do so today. 7 Various approaches, such as the predominant purpose test, have been offered by commentators to address this lack of explicit clarity in Article 2.8

Even within jurisdictions that have adopted the predominant purpose test, courts often use different factors to assess whether the predominant purpose of the transaction is for the provision of goods or services.9 As a result, there is a lack of consensus on what transactions are subject to Article 2.10 A number of courts have applied Article 2 to transactions involving software, while other courts have reached the opposite conclusion.11 In a 2016 district court case involving Article 2's role in a software transaction the court stated:

The applicability of the Uniform Commercial Code to software is a question that has confounded courts in the digital age. For every court that finds that the weight of authority favors application of common law and not the UCC with regard to software licenses, another finds that courts nationally have consistently classified the sale of a software package as the sale of a good for UCC purposes. 12

Other complications arise in software transactions where software is combined with hardware or where other products are provided with the software.13 Such agreements may be viewed as hybrid transactions and evaluated under the predominant purpose test. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Hybrid Transactions and the INTERNET of Things: Goods, Services, or Software?
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.