Milau Associates, Inc. v. North Avenue Development Corp., 42 N.Y.2d 482 (1977)

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When a contract is primarily for services, with the sale of goods being incidental, the implied warranty provisions of the Uniform Commercial Code (UCC) do not apply.

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Summary

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Milau Associates was the general contractor and Higgins Fire Protection the subcontractor for the construction of a warehouse sprinkler system. After a pipe burst due to a “water hammer” effect and a pre-existing notch, the tenants sued for negligence and breach of implied warranty. The court held that the contract was predominantly for services, not the sale of goods, and therefore UCC implied warranties did not apply. The essence of the agreement was the provision of a construction service, not merely the sale of a sprinkler system’s components. The plaintiffs’ failure to prove negligence precluded recovery.

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Facts

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Commercial tenants in a warehouse suffered water damage due to a burst pipe in the sprinkler system.r
The break was attributed to a