1998 Laura McNeill Hutcheson.

B.A. 1994, Rutgers University; J.D., 1998, University of Michigan Law School. Ms. Hutcheson is an associate at McGuire, Woods, Battle & Boothe in Washington, D.C., and was formerly an Executive Editor of the University of Michigan Journal of Law Reform.

1. See The National Conference of Commissioners on Uniform State Laws (visited Nov. 9, 1998) <http://www.law.upenn.edu/library/ulc/ulc.htm>.

2. See generally U.C.C. 2B (Feb. 1998 Draft).

3. U.C.C. 2B-103(a)(2) (Mar. 1998 Draft).

4. See U.C.C. 2B-103, Reporter's Note 2 (Feb. 1998 Draft).

5. See id.; see also infra Part IV.A.

6. See U.C.C. 2B-103, Reporter's Note 5 (Feb. 1998 Draft).

7. See U.C.C. Article 2B, Preface at 8-9 (Sept. 25, 1997 Draft) (stating that "limitations [on the use of software] are commercially important because the technology makes copying, modification and other uses easier to achieve in forms that can yield commercially harmful results ... Article 2B reflects ... the need for a focused body of law applicable to these products ... [N]o common law exists on many of the important questions ....").

8. See U.C.C. 2B-103(a) & Reporter's Note 5 (Feb. 1998 Draft). In addition, contracts involving services not within Article 2B's scope may fall under Article 2B's contract formation rules if Article 2B's subject matter is the predominant purpose of the contract. See U.C.C. 2B-103(c)(2) (Mar. 1998 Draft) (using language that limits the scope of Article 2B's rules of contract formation to contracts predominantly related to subject matter or services within the scope of Article 2B except where the parties agree to be bound by the terms of Article 2B); U.C.C. 2B-103, Reporter's Note 9 (Feb. 1998 Draft) (asserting that the scope of Article 2B's rules of contract formation is not limited to contracts involving only services and subject matter within Article 2B's scope).

9. See U.C.C. 2B-103, Reporter's Note 5 (Feb. 1998 Draft).

10.See id.

11. See U.C.C. 2B-103(b)(2)(C) (Mar. 1998 Draft). This exclusion for embedded software does not apply if the embedded software is in a disk, computer, or other information processing system. See id.

12. See id. 2B-103(b)(2)(A).

13. See U.C.C. 2B-103, Reporter's Note 2 (Feb. 1998 Draft).

14. See U.C.C. 2B-103(b)(2)(B) (Mar. 1998 Draft).

15. See id. 2B-103(b)(2)(E).

16. See id.

17. See id. 2B-103(b)(1), 2B-103(b)(2)(D).

18. See U.C.C. 2B-103, Reporter's Note 8(b) (Feb. 1998 Draft).

19. See id.

20. See id. 2B-103(c)(2)(A).

21. Id.

22. See U.C.C. 2-719(3) (1994).

23. Both articles contain a four-year statute of limitations that begins to run when the breach occurs (upon tender of delivery). See id. 2-725(2); U.C.C. 2B-705(a) (Feb. 1998 Draft); cf. Triangle Underwriters, Inc. v. Honeywell, Inc., 604 F.2d 737, 744 (2d Cir. 1979) (agreeing that the statute of limitations begins tolling upon the occurrence of the negligent act, but that, in this case, the negligent act was the failure to deliver a working computer system, not the negligence that resulted in the inability to deliver a working computer system). Article 2B also has an alternate statute of limitations that runs for one year after the harm is or should have been discovered. See U.C.C. 2B-705(a) (Feb. 1998 Draft). A recent draft of revised Article 2 would conform to Article 2B's additional one-year statute of limitations period. See U.C.C. 2-814(a) & Reporter's Note 1 (Mar. 1, 1998 Draft).

24. See id..

25. See U.C.C. Article 2B, Preface at 9 (Feb. 1998 Draft). Originally, the drafters intended the scope of the new Article to cover all transfers of information, whether in software, print, or other media format. See U.C.C. 2B-103(a) (Feb. 2, 1996 Draft) (providing that Article 2B "applies to transactions in information, including licenses, access contracts, unrestricted transfers of information, sales of copies of information and software contracts, and to agreements to support, maintain, develop, or modify information"). In fact, the Reporter's Notes to the early draft express concern about restricting the scope. See U.C.C 2B-103, Reporter's Note 1 (Apr. 2, 1996 Draft) (stating that focusing the scope of Article 2B on one type of information, such as digital information, was "too narrow and too closely linked to a particular technology"). But later drafts limit the scope of Article 2B to "licenses of information and software contracts" and the contracts for the information or software maintenance or modification. See U.C.C. 2B-103(a) (Sept. 25, 1997 Draft).

26. See U.C.C. 2B-103(d)(4) (Sept. 25, 1997 Draft); U.C.C. 2B-103(d)(3) (1997 Annual Meeting Draft); U.C.C. 2B-103(d)(3) (May 5, 1997 Draft); U.C.C. 2B-103(d)(3) (Mar. 21, 1997 Draft); U.C.C. 2B-103(d)(3) (Jan. 20, 1997 Draft); U.C.C. 2B-103(d)(3) (Dec. 12, 1996 Draft); U.C.C. 2B-103(d)(3) (Nov. 10, 1996 Draft); U.C.C. 2B-103(d)(3) (Sept. 4, 1996 Draft); U.C.C. 2B-103(d)(3) (July 12-19, 1996 Annual Meeting Draft); U.C.C. 2B-103(d)(6) (May 3, 1996 Draft); U.C.C.. at 2B-103(d)(6) (Apr. 2, 1996 Draft); U.C.C. 2B-103(d)(6) (Feb. 2, 1996 Draft). The wording of the exclusion of embedded computer programs remained substantially the same until later drafts of Article 2B.

27. See U.C.C. 2B-103(c)(2) (Feb. 1998 Draft). The text of the February 1998 draft of the exclusion reads:

(c) Except as otherwise provided in this section, this article does not apply to the extent that an agreement is ...

(2) a sale or lease of a computer program embedded in goods and sold or leased as part of the goods, unless

(A) the goods are merely a copy of the program or are an information processing system in which the program is to operate,

(B) the program was developed specifically for the transaction, or

(C) the program was subject to a separate license with the transferee of the goods ....

Id. Most of this Article reflects analysis of this draft. Another recent draft has changed the language to exclude:

a sale or a lease of a product that has a computer program embedded in it, but this article applies if the product is:

(i) merely a copy of the program;

(ii) a computer;

(iii) another information processing system and a primary purpose of the transaction is to give access to or use of the program.

U.C.C. 2B-103(b)(2)(C) (Mar. 1998 Draft).

28. See U.C.C. 2B-103(c)(2), Reporter's Note 8(b) (Feb. 1998 Draft); see also id. 2B-103(b) ("If another article of [the U.C.C.] applies to a transaction, this article does not apply to the subject matter or related rights and remedies governed by the other article except as provided in this section ....").

29. See id. 2B-103(c)(2)(C).

30. Id. 2B-103(c)(2)(B). In at least one case, it was the degree to which software was developed specifically for a transaction that caused courts to label a software contract as one for services. See Micro-Managers, Inc. v. Gregory, 434 N.W.2d 97, 100 (Wis. Ct. App. 1988).

31. U.C.C. 2B-103(c)(2)(B) (Feb. 1998 Draft).

32. See id. 2B-103, Reporter's Note 8(b) (listing navigation software in airplanes and software in automobile braking systems as two examples of embedded software that fall within the exclusion).

33. See id. 2B-103(c)(2)(A) (excluding software embedded in copies of a program, such as disks, or "information processing systems," such as computers). Note also that the reporter has drawn attention to the difficulty of determining the scope of the embedded software exclusion. See U.C.C. Article 2B, Preface at 17 (Sept. 25, 1997 Draft) ("Defining the scope of this exclusion has been difficult").

34. See U.C.C. 2B-103, Reporter's Note 8(b) (Feb. 1998 Draft).

35. See id.

36. See id. 2B-103(c)(2)(A).

37. Id.

38. See id. 2B-103, Reporter's Note 5.

39. See U.C.C. Article 2B, Preface at 15 (Feb. 1998 Draft).

40. Since it remains important to the good, the software in an airplane or car is not "merely incidental." If the software was "merely incidental to subject matter not governed by this article," then the law governing the main transaction would also govern the incidental licensed material or software. U.C.C. 2B-103(a) (Feb. 1998 Draft); see also id. 2B-103, Reporter's Note 4. If the embedded software were within the "merely incidental" exception to Article 2B, then the specific exclusion for embedded software would be superfluous.

41. I do not use the predominant purpose test to determine whether the purpose of owning the product is for the service of the good or the software because of the very nature of embedded software. The predominant purpose test is usually employed to determine whether the services or goods aspect of a transaction predominates. See Advent Sys. Ltd. v. Unisys Corp., 925 F.2d 670, 676 (3d Cir. 1991). The test uses such factors as cost and structure of agreement. See id. Relative cost and the structure of the agreement are not helpful factors when determining whether goods or embedded software is the main purpose because the two are usually sold as a package, without any proportional distribution of sale price between the two. If the good and its embedded software were priced separately, it would seem that the software would not be within the exclusion because it was not "sold or leased as part of the goods," as required by the provision. U.C.C. 2B-103(c)(2) (Feb. 1998 Draft). In addition, I do not list the cumbersome application of two laws to one transaction as one of the possible policies underlying the exclusion of embedded software. This would not seem to be an underlying policy of Article 2B because Article 2B explicitly rejects the predominant purpose test in hybrid transaction situations despite the awkwardness of applying more than one law. See id. 2B-103, Reporter's Note 6.

42. See U.C.C. Article 2B, Preface at 14 (Feb. 1998 Draft).

43. Article 2 employs a gravaman of the action test; however, the information component of this transaction escapes such treatment because it would fall within the scope of Article 2B. See U.C.C. 2B-103(d) (Feb. 1998 Draft); see also U.C.C. 2B-103, Reporter's Note 4 (Sept. 25, 1997 Draft). It is not clear whether a disk is considered a good under Article 2 or information under Article 2B. According to the language of Article 2B, "media that contains the information" is within its scope. See U.C.C. 2B-103(d)(1) (Feb. 1998 Draft). However, neither Article 2B nor the Reporter's Notes define media. If the exclusion of embedded software does not encompass goods that "are merely a copy of the program" (i.e. disks), then it would seem superfluous to also specifically include disks in the scope of Article 2B under Section 2B-103(d)(1).

44. Ironically, in an early case applying Article 2 to software, the court relied on the fact that the software was sold with hardware as a single unit-basically, that the software was embedded in the purchased goods and that the defendant did not intend or expect that the software would be part of a separate contract outside Article 2. See Neilson Bus. Equip. Ctr., Inc. v. Italo V. Monteleone, M.D., P.A., 524 A.2d 1172, 1174-75 (Del. 1987).

45. See supra text accompanying notes 22-24 (discussing the remedies available under Article 2).

46. See U.C.C. 2B-103, Reporter's Note 5 (Feb. 1998 Draft).

47. Article 2B contains language which allows consumer protection laws to supersede Article 2B, but only if these laws existed prior to the adoption of Article 2B. See U.C.C. 2B-104(a) (Feb. 1998 Draft). This fact does not necessarily preclude the necessity of excluding embedded software in order to increase consumer remedies. Excluding the embedded software emphasizes the application of consumer protection laws in certain situations. In addition, consumer protection laws may not apply to software. See Margie Wylie, Perspectives: Shrink-Wrapping the Social Contract (visited November 8, 1998) <http://www.news.com/Perspectives/mw/mw4_23_97a.html> (stating that only goods are protected by state consumer protection laws, and that software may not be considered a good under these laws).

48. See supra text accompanying notes 22-24.

49. There is little information available pertaining to the frequency of physical injury or substantial economic harms suffered by consumers as a result of software malfunction. See Complaints from Consumers to the New York Better Business Bureau (1996-97) (on file with author) (detailing eight complaints about software malfunction, incompatibility, and poor performance in which 7 of the 8 consumers requested only a refund of the purchase price to settle their complaint); Letter from Anne O'Grady, Information and Investigations Specialist, New York Better Business Bureau, to the author (received Mar. 10, 1998) (on file with author) (stating that most computer complaints deal with sales or repair); Telephone Interview with Jennifer Borio, Pittsburgh Better Business Bureau (Mar. 5, 1998) (on file with author) (stating that most computer complaints are about hardware capabilities such as compatibility or RAM expansion, and that no consumers have complained of defective software); The vice president and counsel for the Software Publishers Association in 1997, Mark Nebergall, does not know of any substantial harm that has occurred because of software defects, either. See Brian McWilliams, The End of Software Licenses?, PC WORLD ONLINE (visited November 8, 1998) <http://www.pcworld.com/cgi-bin/database/body.pl?ID=970307181430> (quoting Mr. Nebergall). In addition, several Westlaw searches failed to yield any cases involving physical harm due to software malfunction. But this fruitless search does not necessarily indicate a lack of injuries due to software malfunction. Most physical harm caused by software malfunction probably occurs in non-consumer settings. See Maria Stephens, Hit and Run at Honda (April, 1996) (visited November 8, 1998) <http://www.uaw.org/solidarity/9604/honda.html> (reporting a case of robot malfunction at a Marysville, Ohio, Honda plant in which the robot threw an employee against a pole, resulting in five years of continual catastrophic nerve damage, blackouts, and pain). Thus, consumer protection laws may not apply in practice to cases involving harm due to malfunction of embedded software.

50. See U.C.C. 2B-103, Reporter's Note 5 (Feb. 1998 Draft).

51. See id. Article 2B, Preface at 15 (Feb. 1998 Draft).

52. A computerized, robotic endoscope is an optical tube, or laparoscope, that feeds images to a video screen and may be threaded inside the body during minimally invasive procedures. The Automated Endoscopic System for Optimal Positioning (the AESOP) is an endoscope available from Computer Motion in both a regular model and a voice activated model. See Computer Motion homepage (visited Mar. 3, 1998) <http://www.computermotion.com>.

53. Computer Motion presented a computerized surgical system designed to perform heart bypasses at a symposium in January of 1998, and plans to apply for FDA approval in 1998. See Heart Bypass Surgery Feasible Through Chest Incisions Smaller than the Diameter of a Pencil (visited Mar. 3, 1998) <http://www.computermotion.com/pressr25.htm>. The machine, named "ZEUS," has three robotic arms: one uses an endoscope, while the other two use surgical instruments. See id. The press release states:

[w]hile seated at the console, the surgeon's macro movements are input into the System through handles which resemble conventional surgical instruments. These inputs are scaled and filtered through a computer and translated via the robotic arms into precise micro movements at the operative site. For example, the surgeon might move the surgical instrument handle at the console 1 inch while the corresponding robotic instrument tip moves only 1/10 of an inch.

Id.

54. The Jet Propulsion Laboratory, under contract with the National Aeronautics and Space Administration, and in conjunction with MicroDexterity Systems, Inc., has developed and performed simulated testing of a two-armed robot-assisted microsurgeries workstation (RAMS) for eye, brain, ear, nose, throat, face, and hand operations. See Robot Assisted Microsurgery (visited Mar. 3, 1998) <http://robotics.jpl.nasa.gov/tasks/rams/homepage.html>.

55. See supra notes 22-22 and accompanying text.

56. See U.C.C. 2B-103(c)(2)(B) (Feb. 1998 Draft).

57. See id.

58. See U.C.C. 1-102(1).

59. See id. 1-102(2).

60. See id. 1-102 cmt.1.

61. See U.C.C. 2B-103, Reporter's Note 3 (Sept. 25, 1997 Draft).

62. See supra Part II.A.

63. The fourth factor, the ease of copying, was discussed in the preceding paragraphs in the context of fulfilling the drafters' intentions to include all information particularly susceptible to copyright infringement.

64. The laptop can also program the chip with a copy of the software, making the chip seem closer to a copy of a program, similar to the disk copies of software which are excluded from Article 2B. See Telephone Interview with Bill Winter, former vice-president of Wells Fargo, Inc. (Feb. 16, 1998) (on file with author).

65. See id. In a self-installed alarm system, the customer does not use a laptop to program the software. Instead, she customizes the program by sliding levers called "dipswitches" to activate or deactivate trip points. The customization of the program is manual, and does not require the use of a computer. See id. One RadioShack model currently available (catalog model number 49-485) lists "customizing" as one step in the installation instructions, but does not mention a computer. In this particular model, the customer must connect wires to certain breaker points in a central box instead of sliding dipswitches. The customer must also program a "control center" with passwords, designated trip points and alarm power schedules.

66. See id.

67.See id.

68.See id.

69. The exclusion of embedded software is not applicable if the software is "subject to a separate license with the transferee of the goods." U.C.C. 2B-103(c)(2)(C) (Feb. 1998 Draft). The bargaining power of the buyer may underlie this condition, but it also applies to cases in which the embedded software was not developed specifically for the transaction. If bargaining power of the buyer is the underlying policy of both of these conditions, then there are two ways to tell that the buyer has sufficient bargaining power to include the embedded software within the scope of Article 2B: the buyer has bargained a specific license just for the software, or the buyer has sufficient money to require the specific development of a program.

70. U.C.C. 2B-103(c)(2) (Feb. 1998 Draft).

71. See U.C.C. 2B-103 Reporter's Note 5(c) (Mar. 1998 Draft). The Reporter's Notes state that:

[The examples of computers and navigation software] together with the general principle of the exclusion set two bright lines at either end of a continuum. Article 2B does not apply to cars, toasters, washing machines and other traditional goods, even if part of the goods consists of embedded software.... Within these two extremes lies an inherently gray area. As modern products are increasingly automated and operated by digital software, it is important to provide guidance on the relative distribution of treatment between this Article and Article 2 or 2A in this gray area. Under the exclusion here, embedded software is covered by Article 2B if contained in a product whose primary purpose is to provide access to the functional or other attributes of the program, as contrasted to performing other information processing activities. Thus, while a television set in modern practice is increasingly driven by computer programs, it remains a television set whose purpose is to provide television program reception unless or until the system evolves into something more or different in which a primary purpose is to offer software processing capability.

Id. (emphasis added).

72.Id.

73. See supra Part II.A.

74. See U.C.C. 2B-103(c)(2)(B) (Feb. 1998 Draft).

75. See supra Part II.B.

76. See U.C.C. 2B-102(31) (Feb. 1998 Draft).

77. Id. The full text of the definition of a mass market transaction reads:

(31) "Mass-market transaction" means a consumer transaction and any other transaction in information directed to the general public as a whole under substantially the same terms for the same information with an end-user licensee. To qualify as a mass-market transaction if the licensee is not a consumer, the licensee must acquire the information in a retail transaction under terms and in a quantity consistent with an ordinary transaction in that marketplace. The term does not include:

(A) a contract for redistribution;

(B) a contract for public performance or public display of a copyrighted work;

(C) a transaction in which the information is or becomes customized or otherwise specially prepared for the licensee;

(D) a site license, or

(E) an access contract not involving a consumer.

Id. This definition seems to create the same problem as the phrase "developed specifically for the transaction" because it provides that a mass market transaction does not include "a transaction in which the information is or becomes customized or otherwise specially prepared for the licensee." Id.. However, the Reporter's Notes indicate that this is simply a drafting oversight and that the customization stricture does not apply to consumers. See id. 2B-102, Reporter's Note 29 ("[W]here the information product is customized for the licensee and that licensee is not a consumer, the transaction lacks the anonymous, non-negotiated character of the mass market.") (emphasis added).

Another problem with the application of this definition to the exclusion of embedded software relates to the types of retail markets in which a mass market transaction takes place: arenas in which the general public shops, like grocery stores, malls, gas stations and department stores. While the purchase of home appliances might occur in these arenas, home alarm systems, for example, are not sold in stores. But this restrictive definition of a retail market in which mass market transactions take place may also be an oversight by the drafters. It does not include purchases made on the Internet or "anonymous" and "non-negotiated" purchases. However, the Reporter's Notes indicate that an Internet transaction might be considered a mass market transaction. Id. (noting that the definition of mass market transactions includes consumer Internet or on-line transactions).

78. See, e.g., id. 2B-208 (enforcing form contracts in mass market transactions only if there is an opportunity to review and if there is an affirmative manifestation of assent); id. 2B-502(2)(B) (giving a mass market licensee the right to transfer a non-exclusive license without the consent of the licensor).

79. See id. 2B-102(31); 2B-103(c)(2)(B).

80. Id. 2B-103(c)(2)(B).

81. See U.C.C. 2B-103(b)(2)(C) (Mar. 1998 Draft).

82. See U.C.C. 2B-103 Reporter's Note 3 (Sept. 25, 1997 Draft).

83. See U.C.C. 2B-103(b)(2)(C) (Mar. 1998 Draft).

84. See id. 2B-103(c)(1) & Reporter's Note 3.

85. See id. 2B-103(c)(2)(A).

86. See id. 2B-103(b)(2)(A); U.C.C. 2B-103(a)(1) (Feb. 1998 Draft). In addition, the Reporter's Notes to the merely incidental exclusion are identical in each draft. See U.C.C. 2B-103, Reporter's Note 5(a) (Mar. 1998 Draft); U.C.C. 2B-103, Reporter's Note 4 (Feb. 1998 Draft); but c.f. U.C.C. 2B-103, Reporter's Note 2(d) (Aug. 1, 1998 Draft). This Article mainly cites to the February 1998 draft, but applies equally to both drafts because of the similarity of the provisions.

87. See U.C.C. 2B-103, Reporter's Note 4 (Feb. 1998 Draft).

88. See id.

89. See U.C.C. 2B-104, Reporter's Note 2 (Aug. 1, 1998 Draft).

90. See U.C.C. 2B-103(c)(1) (Mar. 1998 Draft).

91. See id. 2B-103(c)(2)(A) ("The contract formation rules of this article apply to the entire transaction if: (A) the contract includes services that are not within this article, but the subject matter that is within this article is the predominant purpose of the transaction ...").

92. See id. (applying the predominant purpose test only to issues of contract formation).

93. See U.C.C. 2B-103(b) (Sept. 25, 1997 Draft) ("[I]f another article of [the Uniform Commercial Code] applies to a transaction, this article does not apply to the part of the transaction involving the subject matter governed by the other article except to the extent that this article deals with financial accommodation contracts."). Section 2B-103(c) of the Sept. 25, 1997, draft states:

If a transaction involves both information and goods, this article applies to the information and to the physical medium containing the information, its packaging, and its documentation, but Article 2 or 2A governs standards of performance of goods other than the physical medium containing the information, packaging, or documentation pertaining to the information. If a transaction includes information covered by this article and services outside this article or transactions excluded from this article under subsection (d)(1) or (2), this article applies to the information, physical medium containing the information, and its packaging and documentation.

Id. This earlier draft of the scope provision intended to cover licensing or software governed by Article 2B regardless of how intermingled the software had become with goods or transactions not covered under Article 2B. The Reporter's Notes state that the "primary rule applies each [article] to its particular subject matter" in mixed transactions. Id. 2B-103, Reporter's Note 4 (Sept. 25, 1997 Draft). The Reporter specifically rejected the predominant purpose test from common law. See id. The predominant purpose test is primarily used in the Article 2 context when determining whether to apply Article 2 to a transaction involving both goods and services. If the purpose of the transaction is predominantly to sell goods, then it is covered under Article 2; but if the purpose of the transaction is predominantly to sell services, then it is covered by other law. See U.C.C. 2-102 (1994); JAMES J. WHITE & ROBERT S. SUMMERS, UNIFORM COMMERCIAL CODE 1-1 (4th ed. 1995). Note that, under the predominant purpose test, Article 2 may apply to a sale consisting almost entirely of services as long as the predominant purpose of the transaction is the sale of a good. For examples of applications of the predominant purpose test, see United States ex rel. Bartec Indus., Inc. v. United Pac. Co., 976 F.2d 1274 (9th Cir. 1992), amended, 15 F.3d 855 (9th Cir. 1994); St. Anne-Nackawic Pulp Co. v. Researh-Cottrell, Inc., 788 F. Supp. 729 (S.D.N.Y. 1992); Hope's Architectural Prods., Inc. v. Lundy's Constr., Inc., 781 F. Supp. 711 (D. Kan. 1991), aff'd, 1 F.3d 1249 (10th Cir. 1993). Instead of the predominant purpose test used in Article 2 mixed transaction cases, earlier versions of Article 2B used a gravaman of the action test. See U.C.C. 2B-103, Reporter's Note 4 (Sept. 25, 1997 Draft).

94. The Reporter's Notes in the February 1998 draft of Article 2B state that "[t]he article does not cover all contracts in [the copyright and information] industries or all contracts involving information. It focuses on license contracts and on transactions typically conducted in areas of commerce associated with digital technologies." U.C.C. 2B-103, Reporter's Note 1 (Feb. 1998 Draft).

Earlier drafts of section 2B-103 were much broader in scope. A February 1996 draft provided that the article "applies to transactions in information, including licenses, access contracts, unrestricted transfers of information, sales of copies of information and software contracts, and to agreements to support, maintain, develop, or modify information." Unlike the merely incidental test which limits the scope of the latest draft of Article 2B, the earlier drafts included transactions as long as "information exists at the time of the contract, is expected to come into being after the contract is formed, or is to be developed, discovered, compiled, or transformed as part of performance of the agreement ...." Id. 2B-103(a).

95. See id. 2B-103, Reporter's Note 4.

96. Id. Earlier versions of this exclusion were more specific. See U.C.C. 2B-103(d)(3) (Feb. 2, 1996 Draft) (excluding the application of Article 2B to "a contract for professional services involving performance by a member of a regulated profession with respect to services commonly associated with regulated aspects of that profession"). Article 2B no longer requires the profession to be regulated. The only requirement is that the transfer of information be "incidental." See U.C.C. 2B-103, Reporter's Note 4 (Feb. 1998 Draft). One reason given for the exclusion of information transferred pursuant to professional services was the fact that the professions were already regulated. See U.C.C. 2B-103, Reporter's Note 7 (Feb. 2, 1996 Draft). The fact that the exclusion is now extended to professionals who are not regulated leads to the conclusion that another policy is really behind the exclusion in its current form.

97. See U.C.C. 2B-103, Reporter's Note 4 (Feb. 1998 Draft).

98. See id. ("Of course, as various personal service provide[r]s engage in related, but broader activities, Article 2B applies.").

99. See id.

100. See id. 2B-103(c)(4).

101. See U.C.C. 2B-103(d)(3) (Apr. 2, 1996 Draft) (excluding "a contract for professional services involving performance by a member of a regulated profession with respect to services commonly associated with regulated aspects of that profession").

102. See id. 2B-103, Reporter's Note 7(b) (assuming that "there is no need to deal with these contracts to the extent that they fall within general areas of professional regulation"). The Reporter's Notes also indicate that the regulated professionals are only governed by Article 2B if they are engaging in activities which are not regulated by the profession. See id.; U.C.C. 2B-103, Reporter's Note 7(b) (Feb. 2, 1996 Draft). The Reporter's Notes in a later draft even state that "the exclusion only pertains to regulated services and not to other contracts or services" for the purposes of "avoid[ing] confusion between the interplay of this Article and the regulatory standards of regulated professions." U.C.C. 2B-103, Reporter's Note 6 (Dec. 12, 1996 Draft). This exclusion of transfers of information in regulated professions persists up to the November 1997 draft. See U.C.C. 2B-103, Reporter's Note 5(a) (Nov. 1, 1997 Draft).

103. See U.C.C. 2B-103, Reporter's Note 4 (Feb. 1998 Draft).

104. See id.

105. See supra Part II.A.

106. U.C.C. 2B-103, Reporter's Note 4 (Feb. 1998 Draft).

107. See id. 2B-102(23) (stating that the definition of information includes "images").

108. See id. 2B-103(c)(4).

109. See id. 2B-103, Reporter's Note 3.

110. See id. 2B-103(c)(3).

111. See id. 2B-103(c)(1).

112. See U.C.C. 2B-103(c)(4) (Feb. 1998 Draft).

113. Cf. Letter from Roland E. Brandel et al., to the Banking Industry Article 2B Group (Nov. 19, 1997), available at <http://www.2Bguide.com/docs/mofo1.html> (visited Nov. 23, 1998) (suggesting a similarly broad exclusion of "the provision of a service as to which access to, use of, or processing information is not the primary purpose of the service, but is the technology incidentally used to accomplish the service"). The March 1998 draft of Article 2B achieved an expansion of the exclusion by eliminating the language referring to regulated professions, instead excluding agreements for personal services from the scope of Article 2B. See U.C.C. 2B-103(b)(2)(E) (Mar. 1998 Draft).

114. U.C.C. 2B-103 Reporter's Note 4 (Feb. 1998 Draft).

115.Id.

116. See id. ("What is meant here is not simply that the personal services predominate or that obtaining the services was the predominant purpose of the transaction ....").

117. See Hudson v. Town and Country True Value Hardware, Inc., 666 S.W.2d 51, 54 (Tenn. 1984) (holding that the predominant purpose test applied to a hybrid transaction because the application of more than one law would cause "insurmountable problems of proof in segregating assets and determining their respective values ... to apply two different measures of damages.").

118.Id.

119. See U.C.C. 2B-103, Reporter's Note 4 (Feb. 1998 Draft).

120. See id. 2B-103(d).

121. Id. 2B-103(c)(1).

122. See id. 2B-103, Reporter's Note 6.