Opinion ID: 2606539
Heading Depth: 1
Heading Rank: 2

Heading: Limitation Statute

Text: The trial court applied Section 55-2-725, which is part of the New Mexico Uniform Commercial Code, which states: An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued. Since the breach occurred on June 22, 1979, under this section the action would be barred by the statute of limitations, presuming a contract for sale is involved. We must determine whether this is a contract for the sale of goods which the limitation period in the Uniform Commercial Code would govern. NMSA 1978, Section 55-2-106(1) states in pertinent part that a `[c]ontract for sale' includes both a present sale of goods and a contract to sell goods at a future time. A `sale' consists in the passing of title from the seller to the buyer for a price. Looking carefully at the discount agreement, it states that the terms and conditions of sale (Form 100) prevailing at the time a purchase order is accepted by [Data General] will apply to all purchases... . This requires that another form, contract or invoice be used at the time of actual purchase. Further, there is no specific computer equipment to be purchased under this agreement. The agreement requires that a certain number must be purchased by a certain time, including five percent of the minimum contract amount at the time of contracting, in order for the discount to apply. No title is passed for a price by this agreement, and there is no requirement to purchase even one computer. Therefore, it is not a contract for sale. CDI argues that a warranty is given in the agreement for the equipment and thus the contract is for the sale of computers. Since this warranty applies to all the equipment sold by Data General and not just specific pieces bought by CDI, it would not bring it within the contract for sale, as defined previously by Section 55-2-106(1). Sale, as defined by the U.C.C., is the passing of title for a price. Section 55-2-106(1). Since there was no specific exchange of equipment with this agreement, no title passed. 1 A. Squillante & J. Fonseu; Williston on Sales, § 5-7 at 106 (1973). The court in Dynamics Corp. of America v. International Harvester Company, 429 F. Supp. 341 (S.D.N.Y. 1977), stated that in determining whether a contract is for the sale of goods and thus covered by the U.C.C., it is necessary to look to the main objective or intent of the parties' agreement. The dominant objective in the present case was to provide a discount schedule, if sales were made. We conclude that Section 55-2-725 would not govern this agreement. NMSA 1978, Section 37-1-3(A), with the limitation of six years would control this written contract. Thus, summary judgment on the grounds that the statute had run would be improper and the holding by the trial court is reversed. This case is remanded to the trial court for trial. IT IS SO ORDERED. SOSA, Senior Justice, and FEDERICI and WALTERS, JJ., concur. STOWERS, J., dissents.