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Goods v. Services: What’s the Difference?

Under Florida’s contract laws, two distinct sets of doctrines exist, depending upon the nature of the agreement between the two parties. Understanding this distinction may help in the event of a conflict and will undoubtedly help parties better understand their rights prior to engaging in an agreement with another individual or business.

As your Ft. Lauderdale contract lawyers will explain further, contracts for the sale of goods are governed by Article Two of Florida’s Uniform Commercial Code, while contracts for services are covered by the common law of contracts – which has developed over time through Florida’s judicial system. If you are interested in entering into an agreement with another person or business, and would like to learn more about this distinction, we encourage you to contact Michael P. Feinstein, P.A. by calling 954-767-9662 right away.

Contracts for Goods Under the Uniform Commercial Code

As a general concept, two parties wishing to create and enforce an agreement are free to craft and design their terms as they see fit. This is known as the “freedom of contract,” and Florida courts will adhere to this principle with a steadfast dedication – even if one party later seeks to invalidate a not-so-beneficial term. However, a set of statutes known as the Uniform Commercial Code (UCC) are in existence as “gap fillers” for parties who intended to work under a contract but failed to include certain necessary terms.

The UCC applies only to contracts that involve the sale and purchase of “goods.” This term is defined to include “all things (including specially manufactured goods) which are movable at the time of identification to the contract for sale.” For Florida’s agriculturalists, the term also includes “the unborn young of animals and growing crops,” as well as any other items attached and severable from real property.

The UCC contains dozens of provisions, including several that govern the common scenario of “non-conforming goods.” A non-conforming good, as the name suggests, is one that does not exactly mirror the goods described in the contract (e.g., wrong color or wrong size).

If this occurs, the buyer has several options. He may accept and keep the non-conforming goods. He may also refuse the non-conforming goods and send the lot back at the seller’s expense. He may also sell the non-conforming goods at a reduced price, or find replacement goods, and seek reimbursement from the seller. A seller has a small window of opportunity within which to correct the mistake, so long as the delay will not unreasonably impact the buyer.

Contracts for Services

Essentially, a contract for services is any contract not governed by the UCC. It could include house painting, dog grooming or custom tailoring. If a transaction includes both goods and services, the predominant feature will control the applicability of the UCC versus common law.

The Florida common law is in some ways similar to the UCC in that it encourages the freedom of contracting and will not overly interpret contracts to find language that simply isn’t there. One of the major differences between a UCC contract and a common law agreement for services is that the common law is much more stringent with the terms and interpretations of agreements, and contracts can be invalidated under this system if parties misunderstand one another when forming the agreement.

Common law contracts are also more difficult to modify and may require the cancellation of the original agreement and the execution of a new agreement in order to amend the original terms.

Contact Michael L. Feinstein, P.A. for Contract Help in Ft. Lauderdale Today!

If you are a start-up in need of contract drafting assistance, or you are facing conflict with another individual or business over a contract term, please contact Michael L. Feinstein, P.A. for assistance right away. You can reach our Ft. Lauderdale office by dialing 954-767-9662 today.