COURT OF APPEALS DECISION DATED AND FILED August 6, 2009 David
R. Schanker Clerk of Court of Appeals |
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NOTICE |
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This opinion is subject to further editing. If published, the official version will appear in the bound volume of the Official Reports. A party may file with the Supreme Court a petition to review an adverse decision by the Court of Appeals. See Wis. Stat. § 808.10 and Rule 809.62. |
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APPEAL
from an order of the circuit court for
Before Dykman, P.J., Vergeront and Higginbotham, JJ.
¶1 PER CURIAM. Transform, Inc., appeals an order awarding Wisconsin Dairyland Fudge Co. rescission of its contract with Transform for the purchase of office equipment. The issues are: (1) whether the trial court properly determined that the contract was primarily one for goods, rather than services, and (2) if for goods, whether the trial court properly awarded Dairyland the remedy of rescission. We affirm.
¶2 Transform sold Dairyland a Toshiba “point of sale system,” which consists of computerized cash registers that also store business and employee records. The purchase price included approximately $7,100 for the hardware and $2,500 for programming, training, and implementation.
¶3 The system malfunctioned from the beginning, with the principal failure being its periodic inability to process credit card transactions. After several months the problems remained unresolved, despite Transform’s numerous efforts to repair the system, and Dairyland returned the hardware and demanded a full refund. Dairyland commenced this litigation when the parties were unable to resolve the refund dispute.
¶4 After a bench trial, the trial court held that the contract between the parties was for a mix of goods and services, but primarily for goods. The court found that the product was an “undisputed lemon,” that the defects in it were not incidental but substantially impaired the value of the system to Dairyland, and that Dairyland timely rescinded the contract after repairs proved futile. Consequently, the court determined that Dairyland was entitled to full rescission.
¶5 Transform first contends that the trial court should have
construed the contract as one primarily for its service, rather than for goods.[1] Where, as here, the parties enter into a
contract for a mix of goods and services, courts determine the primary purpose
of the contract by examining whether the predominant purpose is provision of
service, with goods incidentally involved, or vice versa. See
Micro-Managers,
Inc. v. Gregory, 147
¶6 Transform next contends that the court erred by awarding the
equitable remedy of rescission after determining that the contract was
primarily for goods, because contracts primarily for goods are subject to the
Uniform Commercial Code (UCC). See
By the Court.—Order affirmed.
This opinion will not be published. See Wis. Stat. Rule 809.23(1)(b)5.