A recent California Court of Appeal ruling in a dispute over performance of pop-up ads on websites has produced the first precedential California court decision that “contracts for the placement of advertising do not involve the sale of goods under the UCC”, but instead are sales of services.  Accordingly, Uniform Commercial Code provisions regarding formalities of offer and acceptance, substitute performance, damages and other remedies, do not apply since UCC Division 2 law on Sales is by definition applicable to goods, not services.  While the UCC reflects many general principles which may still apply to service transactions by way of common law, specific UCC provisions (such as time periods, formalities and definitions) will not be determinative.  The California decision, while not necessarily surprising, is a helpful clarification given the ambiguity sometimes introduced into ad sales disputes and litigation by the assertion of UCC rights and remedies.  (Wall Street Network, Ltd. v. New York Times Company, California Court of Appeal No. B193251, June 20, 2008)

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