Question

Accessory Overhaul Group, Inc. (AOG), provides commercial aircraft component testing, overhauling, and certification services. AOG had submitted a bid to Mesa Air Group, Inc. (“Mesa”), and its subsidiary, Mesa Airlines, Inc., for work on its planes, which Mesa accepted in the fall of 2007.

AOG began performing work for Mesa in October 2007, and the next month the parties executed a memorandum of understanding (MOU). The MOU provides that it “shall remain in effect until the execution of the Contract by the Parties or its termination as described herein.” From 2007 to 2012, AOG serviced and maintained Mesa’s wheels, tires, and brakes.
Mesa entered Chapter 7 bankruptcy and the parties continued working together without a written contract in place. Mesa then changed companies for its tire contract and refused to pay AOG for its work to date. AOG filed suit and Mesa filed a motion for summary judgment on AOG’s claims. In making its decision on the parties’ rights under the law, which law should the court apply (common law or UCC)? Explain your reasoning.

Answer 1

The determination of whether common law or UCC applies depends on whether the transaction with AOG was predominantly for services or for the sale of goods. Given the information provided, the transaction appears to be primarily for services, suggesting that common law would govern the contractual relationship, pending a review of the details of the MOU and services provided.

Step-by-step explanation:

The question pertains to which body of law the court should apply in deciding the rights between Accessory Overhaul Group, Inc. (AOG) and Mesa Airlines when AOG filed suit against Mesa for unpaid services. The court should consider whether the transaction was predominately for goods or services. If the performance involved the sale of goods, the Uniform Commercial Code (UCC) would typically apply. However, if the transaction was primarily for services, with goods being incidental, then common law would more likely govern the contractual relationship.

In this scenario, AOG provided testing, overhauling, and certification services which could be considered services rather than goods. Still, the nuances of the MOU and the details of the services (such as if there were any physical parts involved in the wheel, tire, and brake servicing) must be examined to determine the predominant factor of the contract. The presence of physical components does not automatically make the UCC applicable; the primary aspect of the contract must still be established. Therefore, without additional details, a definitive answer cannot be provided, but it leans towards the application of common law based on the information given related to services provided.