## Facts

- Carol Bennett contracted with Peden General Contractors, Inc. (Peden) for construction of a building in Knightdale, North Carolina.
- The agreement described Peden as the general contractor responsible for overseeing and managing the construction and listed Peden’s duties related to that work.
- The contract included a list of building materials to be used, but it did not assign unit prices to those materials.
- Bennett made a partial payment but, after a dispute, refused to pay the remaining balance even though the project was substantially completed.
- Peden sued Bennett seeking payment under the contract.
- Bennett filed a counterclaim seeking rescission of the contract under UCC § 2-608, contending the transaction was governed by Article 2 because it was primarily a sale of goods.
- The trial court granted summary judgment for Peden on Bennett’s UCC-based counterclaim, ruling the contract was predominantly for services rather than goods and therefore was not subject to the UCC.
- Bennett appealed to the North Carolina Court of Appeals.

## Issues

1. Whether the construction agreement between Bennett and Peden was predominantly a contract for services (outside UCC Article 2) or predominantly a contract for goods (within UCC Article 2), such that Bennett could pursue rescission under UCC § 2-608.

## Decision

- The North Carolina Court of Appeals affirmed the trial court’s grant of summary judgment in favor of Peden on Bennett’s counterclaim.
- The court’s disposition was reported without a published opinion.

## Legal Principles

- For a mixed contract involving both goods and services, North Carolina courts apply a “predominant factor” (or predominant purpose) test to decide whether UCC Article 2 governs the transaction.
- If the main thrust of the agreement is the provision of services and any goods are incidental to that service obligation, Article 2 does not apply.
- UCC remedies tied to Article 2—such as rescission/revocation under UCC § 2-608—are unavailable when the transaction is not predominantly for the sale of goods.
- Summary judgment is proper when, viewing the record under the applicable legal test, the nonmoving party’s claim fails as a matter of law.

## Conclusion

The Court of Appeals affirmed summary judgment against Bennett’s UCC § 2-608 rescission counterclaim because the agreement with Peden to construct and oversee completion of a building was predominantly a services contract, with listed materials treated as incidental to the construction work, placing the transaction outside UCC Article 2.


Peden Gen. Contractors, Inc. v. Bennett, 616 S.E.2d 31 (2005)