## Facts

- Embryo Progeny Associates (Embryo Progeny) developed cattle embryos and offspring; Lovana Farms, Inc. (Lovana Farms) operated a cattle herd and provided breeding and maintenance.
- In 1982, the parties entered a lease for seven registered breeding cattle and a related maintenance agreement under which Lovana Farms bred the herd, managed embryo transfer, and maintained offspring for specified fees.
- The agreements contemplated that Embryo Progeny would hold title to embryos and resulting offspring, while Lovana Farms retained a security interest securing payment of fees.
- On January 26, 1985, the parties executed a mutual release agreement that superseded the prior agreements, released prior claims, and set terms for temporary maintenance and eventual transportation of identified offspring/cattle to Embryo Progeny.
- The release included an attachment listing offspring to be shipped; Embryo Progeny agreed to pay temporary maintenance and shipping.
- In December 1986, Embryo Progeny asserted Lovana Farms failed to ship all cattle listed in the release.
- On January 25, 1991, Embryo Progeny sued for breach of the release agreement based on the alleged nondelivery.

## Issues

1. Whether the 1985 release agreement was predominantly a contract for the sale of goods governed by UCC Article 2 (and its four-year statute of limitations) or a services contract governed by a six-year limitations period.
2. If Article 2 applied, whether the breach claim was time-barred because suit was filed more than four years after the alleged nondelivery.

## Decision

- The Georgia Court of Appeals affirmed summary judgment for Lovana Farms.
- The court held the release agreement was a contract for the sale and delivery of goods (identified cattle) within UCC Article 2.
- The court held the action accrued no later than December 1986 and was barred by the four-year limitation period in OCGA § 11-2-725 because the suit was filed in January 1991.

## Legal Principles

- A superseding release agreement that terminates prior contracts and sets current rights and obligations is treated as the operative contract for characterizing the transaction and applying limitations rules.
- For mixed goods-and-services transactions, courts apply a predominant-purpose test; if the dominant feature is the transfer/delivery of goods, UCC Article 2 governs even if incidental services (e.g., temporary maintenance or shipping arrangements) are included.
- Under OCGA § 11-2-725, an action for breach of a contract for sale must be commenced within four years after the cause of action accrues, typically when the breach occurs (such as nondelivery).

## Conclusion

Because the release agreement primarily required delivery of identified cattle and any ongoing maintenance obligations were incidental, the agreement fell under UCC Article 2, and the four-year statute of limitations barred Embryo Progeny’s 1991 breach-of-contract suit based on an alleged 1986 nondelivery.


Embryo Progeny Assocs. v. Lovana Farms, Inc., 203 Ga. App. 447, 416 S.E.2d 833 (Ga. Ct. App. 1992)