Schenectady Steel Co. v. Bruno Trimpoli General Construction Co.
13 U.C.C. Rep. Serv. (West) 993, 43 A.D.2d 234, 350 N.Y.S.2d 920 (1974)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
Under the predominant purpose test, a hybrid contract for both goods and services is governed by common law if the rendition of services is the primary objective of the contract. A party who waives a 'time is of the essence' provision may reinstate it by giving the other party reasonable notice and an opportunity to perform within a new, reasonable timeframe.
Facts:
- On May 8, 1968, respondent entered into a contract with the State of New York to build a bridge over the Alplaus Creek.
- Respondent subcontracted with appellant to furnish and erect the structural steel for the bridge.
- The subcontract stated 'time is of the essence' and required the work to be completed in 1968.
- Appellant encountered technical difficulties with welding the steel beams, causing them to fail radiographic tests.
- Appellant failed to complete the work by the December 31, 1968 deadline, but respondent allowed the work to continue.
- By letters dated January 29, 1969 and February 11, 1969, respondent demanded that appellant provide a definite schedule for completion.
- Appellant responded by letter on February 12, 1969, stating it would proceed 'with all possible speed' but could not provide a specific completion date.
- On March 5, 1969, following an inspection of appellant's shop, respondent canceled the contract.
Procedural Posture:
- Appellant brought an action against respondent in the Supreme Court, Schenectady County (a trial-level court), to recover the reasonable value of services provided.
- Respondent filed a counterclaim seeking damages for appellant's failure to perform on time.
- After a trial without a jury, the trial court dismissed appellant's complaint and entered a judgment for respondent on its counterclaim for $8,628.08.
- Appellant appealed the trial court's judgment to the Supreme Court, Appellate Division (an intermediate appellate court).
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Is a contract for the furnishing and erection of structural steel a contract for the sale of goods governed by the Uniform Commercial Code, or is it a service contract governed by common law?
Opinions:
Majority - Reynolds, J.
No. The contract is a service contract governed by common law. The court applied the predominant purpose test, finding that the main objective of the contract was the erection and installation of the steel, a service, with the transfer of the steel itself being merely incidental. Under common law, respondent waived the original 'time is of the essence' clause by failing to terminate the contract when the 1968 deadline passed. However, respondent's letters in January and February 1969 served as reasonable notice that reinstated timeliness as an essential element. Appellant's failure to provide a definite completion schedule in response constituted a breach of this reinstated condition, justifying respondent's termination of the contract.
Concurring - Greenblott, J.
Yes. While concurring in the result, this opinion argues that the Uniform Commercial Code should apply. The contract had two distinct obligations: furnishing goods (the steel) and performing a service (erection). The UCC should govern the goods portion. Respondent's letters demanding a schedule were, under UCC § 2-609, a justified demand for adequate assurances of performance. Appellant's vague reply failed to provide these assurances, giving respondent the right to repudiate the contract.
Concurring-in-part-and-dissenting-in-part - Cooke, J.
No. This opinion agrees with the majority that the contract is a service contract governed by common law, but dissents from the outcome. The dissent argues that just as respondent waived the original 1968 deadline, it also waived the new demand for a schedule (from the Jan/Feb letters) by allowing work to continue and inspecting the premises on March 1. Therefore, when respondent canceled the contract on March 5, time was no longer of the essence, making the termination improper and a breach of contract by the respondent.
Analysis:
This decision solidifies New York's application of the 'predominant purpose' test for determining whether the UCC or common law governs hybrid contracts. It establishes that complex construction and installation projects are typically classified as service contracts, thereby excluding them from UCC provisions such as the right to demand adequate assurances of performance. The case also provides a clear illustration of the common law doctrine of waiver and reinstatement, demonstrating how a party can lose, and subsequently regain, the right to enforce a 'time is of the essence' clause by providing clear and reasonable notice to the non-performing party.
