1. Kevin S. Brady Writing Sample
Kutty & Associates
5300 Greenwich Boulevard
Valparaiso, IN 46383
FILE: Great Lakes Landscaping & Nursery, No. GL10-383
RE: Kris Sivorsky; contract dispute with King Construction Co.; whether mixed
subcontract is for goods or services under the predominant thrust test
TO: Eric Skwiat
FROM: Kevin S. Brady
DATE: February 20, 2015
STATEMENT OF FACTS
Our client, Kris Sivorsky, is the owner of Great Lakes Nursery & Landscaping, Inc.
(“Great Lakes Nursing”). Ms. Sivorsky graduated from Ball State University in 2008 with a
Bachelor of Arts in Landscape Architecture. Upon graduation, Ms. Sivorsky worked in Chicago
for a landscape architecture firm. Two years later, Ms. Sivorsky left the firm in order to oversee
Great Lakes Nursery, a business located in Valparaiso. Ms. Sivorsky’s late uncle bequeathed
Great Lakes Nursery to her.
Last fall, Lutheran Health Services, Inc. hired King Construction Company (“King
Construction”), a general contractor, to construct a new hospital. Valparaiso city council
approved public funding for the project. King Construction contacted Ms. Sivorsky and asked
her to place a bid for the landscaping portion of the project. Ms. Sivorsky and a King
Construction representative signed the bid pursuant to a “Subcontractor Agreement” dated
November 1, 2014. Ms. Sivorsky attached a specific list of professional services, construction
installation features, construction supplies, design fixtures, and nursery stock to the subcontract
(“Attachment A”).

2. On November 8, Simone Brothers Group (“Simone Brothers”) called Ms. Sivorsky.
Simone Brothers asked Ms. Sivorsky to complete the design and installation of landscaping for a
new mall. Ms. Sivorsky agreed and signed a contract with Simone Brothers. Later that day, Ms.
Sivorsky phoned Kristin Smith, a project manager for King Construction. Ms. Sivorsky notified
Ms. Smith that she was no longer interested in the hospital project. On November 24, Ms. Smith
informed Ms. Sivorsky that King Construction approved the subcontract. After being reminded
of the November 8 phone conversation, Ms. Smith threatened to sue Ms. Sivorsky and Great
Lakes Nursery. Ms. Sivorsky has asked our firm to determine whether she validly revoked the
subcontractor agreement with King Construction.
QUESTION PRESENTED
Under Indiana law, did Kris Sivorsky validly revoke her offer to King Construction
Company pursuant to a subcontractor agreement when the subcontract was in writing, signed,
open for acceptance, and provided for the sale of goods plus services?
BRIEF ANSWER
Probably yes. In Indiana, a court balances the four factors of the “predominant thrust”
test to determine if the main purpose of a “mixed” contract is for the sale of goods or
performance of services. On Sivorsky’s facts, an Indiana court is likely to rule that the sale of
supplies, fixtures, and stock are incidental to the design and installation of custom landscaping.
Therefore, Indiana common law governs the subcontract between Sivorsky and King
Construction Company. As a result, Sivorsky validly revoked her offer to King Construction
Company.
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3. DISCUSSION
Kris Sivorsky (“Sivorsky”), owner of Great Lakes Nursery & Landscaping, Inc. (“Great
Lakes Nursery”), agreed to a subcontract with King Construction Company (“King
Construction”) that will likely be governed by Indiana’s common law. In Indiana, a “mixed”
contract is a transaction between parties that involves services and goods. Insul-Mark Midwest v.
Modern Materials, 612 N.E.2d 550, 553-554 (Ind. 1993). If the main purpose of a mixed
contract is at issue, then an Indiana court balances four factors under the predominant thrust test.
Id. at 554-555. When the court determines that the “predominant factor” of the mixed contract is
for the performance of services, the Indiana common law applies. Id. at 554, 556. Alternatively,
the Uniform Commercial Code (“U.C.C.”) controls when the “thrust” of the mixed contract is for
the sale of goods. Id. at 554.
In this case, Sivorsky’s subcontractor agreement with King Construction is for services
and goods. Therefore, whether Sivorsky validly revoked the subcontract depends on what law
governs. The purpose of this memo is to determine the predominant thrust of Sivorsky’s
subcontractor agreement with King Construction and explain why an Indiana court is likely to
state that the balancing test favors Indiana common law rather than the U.C.C.
I. The predominant thrust of the mixed subcontract between Sivorsky and King
Construction is likely for the performance of services rather than the sale of goods.
A contract classifies as “mixed” when it involves the rendition of services and sale of
goods. Id. at 553-554. In Insul-Mark, the contract between Kor-It and Modern Materials
accounted for coating material and the application of the coating material to Kor-It’s screws. Id.
at 554. The court stated that the coating material was a good while the application of coating
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4. was a service. Id. Because of this, the court determined that a mixed contract existed between
Kor-It and Modern Materials. Id.
Sivorsky’s subcontractor agreement with King Construction is similar. Under
“Attachment A” of the subcontract, the agreement required Sivorsky and Great Lakes Nursery to
perform professional services (“management”) plus construction installation. In addition, King
Construction agreed to compensate Sivorsky for construction supplies, design fixtures, and
nursery stock. An Indiana court will conclude that management and construction installation
constitute as services while King Construction’s purchase of supplies, fixtures, and stock indicate
a sale of goods. Because of this, the subcontractor agreement between Sivorsky and King
Construction is mixed.
Next, an Indiana court applies the predominant thrust test when a dispute arises as to
whether the common law or U.C.C. governs a mixed contract. Id. Under the predominant thrust
test, the court balances the following four factors to determine whether the main purpose of the
mixed contract is for the rendition of services or sale of goods: (1) final product bargained for;
(2) primary reason for entering into the contract; (3) language used to describe the surrounding
circumstances and relationship between the parties; and (4) costs. Id. If the test concludes that a
contract is primarily for services, then common law applies. On the other hand, the U.C.C.
governs if the sale of goods is the main purpose behind the contract. Id. Because the first factor
does not favor Sivorsky, this memo will discuss it first.
A. The final product bargained for between Sivorsky and King Construction is
evidence of a subcontract for goods.
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5. Under the first factor, the court considers the final product bargained for between the
parties to the contract. Id. at 555. A final product consisting of the assembly and installation of
tangible products capable of being removed from real property is evidence of a contract
predominantly for the sale of goods. Ogden Martin Systems of Indianapolis, Inc. v. Whiting
Corp., 179 F.3d 523, 525, 530-531 (7th Cir. 1999). In Ogden, Ogden Martin and Whiting
entered into a mixed contract in which Whiting constructed, delivered, and assembled two
overhead cranes for Ogden Martin’s plant. Id. at 525. Ogden Martin discovered defects in the
cranes after an accident occurred. Id. During its civil action, Ogden Martin argued that the
contract with Whiting was predominantly for the performance of services. Id. at 525-526. The
court held that the purpose of the contract between Ogden Martin and Whiting was for the sale of
goods. Id. at 530. The court reasoned that the final product bargained for by Ogden Martin were
cranes. Id. In addition, the court disagreed with Ogden Martin’s argument that the cranes were
incapable of being removed from its plant. Id. at 525. The Court responded to such a
suggestion: “an object such as a crane is capable of being delivered and yet incapable of being
moved approaches an oxymoron.” Id. at 529.
Here, Sivorsky’s role aligns with Whiting. Sivorsky offered to install landscaping for the
new hospital owned by Lutheran Health Services, Inc. (“Lutheran Health”). The landscaping
consisted of unique design features such as park benches, stones and a statute. In addition,
Sivorsky was to plant flowers, shrubs, trees, and grass seed. Each of the aforementioned items
were tangible, capable of being delivered and removed from the new hospital. Therefore, the
court will likely conclude that viewed together as a whole, the supplies, fixtures, and stock
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6. comprised the final product bargained for and, thus, is evidence of a subcontract predominantly
for the sale of goods.
B. Sivorsky agreed to design and install landscaping unique to Lutheran
Health’s new hospital.
Secondly, an Indiana court examines the primary reason for the contract. Insul-Mark,
612 N.E.2d at 555. If a party agrees to customize a design for a single, private consumer, then
the main purpose of the contract is for the performance of services. Conwell v. Gray Loon
Outdoor Marketing, 906 N.E.2d 805, 812 (Ind. 2009). In Conwell, Piece of America (“POA”)
hired Gray Loon Marketing (“Gray Loon”) to customize its business website. Id. at 808. Soon
after Gray Loon completed POA’s design, POA requested changes. Id. Even though Gray Loon
amended POA’s website, POA disapproved of its implementation and failed to provide Gray
Loon proper payment for the completed work. Id. The court held that the arrangement between
POA and Gray Loon was governed by Indiana common law. Id. at 812. Specifically, the court
reasoned that Gray Loon created a website tailored for POA’s business. Id. The court further
reasoned that Gray Loon indeed used a computer hard drive, a good, but information gathered to
implement POA’s website does not necessarily qualify as goods. Id.
Similarly, Sivorsky submitted a landscaping design for Lutheran Health’s approval.
Furthermore, like POA, King Construction initiated contact with Sivorsky in order to hire a
subcontractor for specific landscaping design and installation. A court will probably conclude
that King Construction, on behalf of a private company, sought a subcontractor to customize a
landscaping design.
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7. However, Sivorsky will likely have to defeat the argument from King Construction that
POA used private money. Here, Valparaiso city council approved Lutheran Health for public
funding. In addition, unlike the agreement in Conwell, the subcontract between Sivorsky and
King Construction did not require a continual business relationship.
Despite such arguments, Sivorsky’s expertise is landscaping design, which is presumably
why King Construction contacted Sivorsky. Also, the funding source for such work does not
alter the agreement between Sivorsky and King Construction. Therefore, an Indiana court will
likely conclude that Sivorsky and King Construction agreed to a custom landscaping design, a
service pursuant to the second factor of the predominant thrust test.
C. The language used by Sivorsky and King Construction describes a
contractual relationship for services.
Under the third factor, an Indiana court reviews the language of the contract, specifically
noting the terms used to describe the performance and relationship of the parties. Insul-Mark,
612 N.E.2d at 555. Plain language used in mixed contracts clearly identifies whether the
predominant purpose of the contract is for the performance of services or sale of goods. Audio
Visual Artistry v. Tanzer, 403 S.W.3d 789, 800 (Tenn. Ct. App. 2012). In Audio Visual Artistry,
Tanzer, a homeowner, contracted with Audio Visual Artistry, a “residential entertainment and
communications firm specializing in custom design projects.” Id. at 791. Tanzer purchased the
design and installation of a home theatre system. Id. at 792. However, Tanzer’s home theatre
system experienced significant problems. Id. at 793. As a result, Tanzer fired Audio Visual
Artistry. Id. The Tennessee Court of Appeals held that the contract between Tanzer and Audio
Visual Artistry was for the sale of goods. Id. at 804. The court noted specific terms used by the
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8. parties as evidence of a mixed contract predominantly for the sale of goods: purchaser,
equipment, delivery, product, goods, and hardware. Id. at 800.
Similarly, terms written in Sivorsky’s subcontract with King Construction clarifies the
main purpose of the transaction. Sivorsky and King Construction agreed to use the following
words and phrases in the subcontract: “installation,” “completion of the work,” “performance,”
“properly licensed to perform all work,” and “our services.” In addition, the subcontract noted
the specific job to be completed: landscaping. Plus, the parties recognized insurance
requirements, worker’s compensation, and OSHA safety standards. Because of such written
evidence, an Indiana court will most likely conclude that the language used in the mixed
subcontract by Sivorsky and King Construction favored one predominantly for services.
King Construction will probably reference the specific goods in “Attachment A” of the
subcontract and, therefore, argue that the language factor does not balance in favor of services.
However, this argument is weak because the subcontract does not mention the actual purchase of
construction supplies, design fixtures, or nursery stock. The subcontract required Sivorsky to
provide such materials and equipment for the “completion of the work.” Therefore, the phrases
and words used by Sivorsky and King Construction favored a subcontract predominantly for
services.
D. Costs do not affect the predominant thrust analysis of Sivorsky’s subcontract
with King Construction.
Lastly, the final factor the court evaluates is the amount of costs for both goods and
services. Insul-Mark, 612 N.E.2d at 555. If the cost of goods is more than services, then it is
likely the sale of goods predominates the mixed contract. Id. For example, in Insul-Mark,
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9. Modern Materials charged Kor-It by the coating material application instead of the coating
material itself. Id. As a result, the Court ruled that pricing showed a transaction predominantly
for services. Id.
Sivorsky’s situation is unique because the cost factor is neutral. The design and
installation comprised half of the subcontract amount while the cost of supplies and nursery
accounted for the remaining portion. Therefore, because the costs of the subcontract between
Sivorsky and King Construction reflect equal amounts for goods and services, a court will
conclude that the costs factor does not alter the predominant thrust test.
Overall, by balancing all four factors of the predominant thrust test, an Indiana court will
likely conclude that the main purpose of the mixed “Subcontractor Agreement” between
Sivorsky and King Construction was for the performance of services. As a result of this
determination, the court will rule that the subcontract was an option contract governed by
Indiana’s common law.
II. King Construction will probably argue that the predominant thrust of the
subcontractor agreement with Sivorsky is for the sale of goods.
In Indiana, and unless context indicates otherwise, the sales chapter of the U.C.C.
“applies to transactions in goods” but not secured transactions. Ind. Code § 26-1-2-102 (2010).
For example, in Ogden, the court concluded that “the delivery and installation of two overhead
cranes constituted a transaction in goods governed by Indiana’s U.C.C.” Ogden, 179 F.3d at 531.
Here, King Construction may apply similar logic. It will likely argue that the main focus of the
subcontract was the purchased nursery stock and design fixtures for the new hospital landscaping
project. King Construction will further add that any service, such as design or installation, was
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10. incidental. If King Construction’s arguments are favorable, an Indiana court will hold, based on
the predominant thrust test, that the U.C.C. governs the mixed subcontract, an option contract.
An option contract in a goods transaction is known as a “firm offer” under the U.C.C.
Ind. Code § 26-1-2-205. To establish a firm offer, one must show (1) an offer by a merchant; (2)
to buy or sell goods; (3) in a signed writing; (4) that provides assurance that the offer will be held
open for a reasonable time if not otherwise stated and is irrevocable for lack of consideration. Id.
Thus, if King Construction establishes these four elements, an Indiana court will probably rule
that the subcontract is a firm offer governed by the U.C.C.
A merchant is a person “who deals in goods of the kind” or otherwise by his occupation
is known as having knowledge or skill peculiar to the practices or goods involved in the
transaction. § 26-1-2-104(1). In Ogden, Whiting possessed the knowledge to assemble two
cranes for Ogden Martin’s plant. Ogden, 179 F.3d at 529. Also, Whiting was identified as the
“seller” in the contract. Id. at 530. Likewise, Sivorsky sells nursery products used in the design
and installation of landscaping. Because of this, Sivorsky is a merchant.
“Goods” are all things movable at the time of identification to the contract for sale. Ind.
Code § 26-1-2-105(1). Ogden exemplifies this definition because the court agreed with the
district court that the two overhead cranes sold to Ogden Martin were identifiable and moveable
at the time of identification to the contract for sale. Ogden, 179 F.3d at 529. Here, Sivorsky
identified the following categories in “Attachment A” of the subcontractor agreement:
construction supplies, design fixtures, and nursery stock. Each item listed under the
aforementioned categories were capable of being moved at the time Sivorsky and King
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11. Construction signed the subcontract. Therefore, a court will conclude that the subcontract
included the sale of goods.
Next, under the U.C.C., a firm offer must be in a signed writing. Ind. Code § 26-1-2-205.
Here, Sivorsky, a merchant, signed the subcontractor agreement, a written document, on
November 1, 2014. Therefore, the third element is satisfied.
Finally, a firm offer must give assurance that it will remain open and not be revocable for
a reasonable time up to three months. Id. Here, the subcontractor agreement states that Sivorsky
promised to hold the “offer open and irrevocable for thirty (30) days.” Due to this language, a
court is likely to conclude that under the U.C.C., Sivorsky was unable to revoke the subcontract,
a firm offer, until December 1, 2014.
Therefore, by applying the U.C.C., a court will conclude that the subcontractor agreement
signed by Sivorsky was an irrevocable firm offer.
CONCLUSION & RECOMMENDATIONS
In summary, Ms. Sivorsky likely revoked the subcontract with King Construction
because the predominant thrust is for the performance of services. An Indiana court will
probably rule that the sale of supplies, fixtures, and stock are incidental to the design and
installation of custom landscaping. Therefore, Indiana common law governs Ms. Sivorsky’s
subcontract, an option contract capable of being revoked unless supported by consideration.
However, no consideration exists; thus, Ms. Sivorsky revoked the subcontract under Indiana
common law.
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12. I recommend conveying these findings to Ms. Sivorsky and consulting with her on how
to proceed in this matter. In my opinion, the best outcome is resolving this dispute prior to any
legal action initiated by King Construction against Ms. Sivorsky.
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