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Publication Date

12-31-2025

Abstract

The development of modular construction has re-raised a question central to construction litigation: whether contracts are governed by Article 2 of the UCC, which controls transactions in goods, or the common law, which controls other transactions, including those for services. Because the modular construction process involves fabrication of units off-site, it complicates the distinction between goods and services—while the final product is the service of constructing a building, the individual modules could arguably be classified as goods.

Although courts have historically treated processes involving prefabrication as the sale of goods, modern modular projects are increasingly becoming more customizable and service-driven. With this evolution, exclusive reliance on the UCC is less consistent with industry realities and doctrinal reasoning. A refined analysis emphasizing project delivery system, customization, and a “scale of modularity” would provide courts with a more consistent method for determining which legal framework applies while limiting the effects of strategic drafting. Ultimately, this would result in a more predictable and flexible framework better suited to the evolving landscape of modular construction.

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