Neilson Business Equipment Center, Inc. v. Monteleone
In Neilson Business Equipment Center, Inc. v. Monteleone, 524 A.2d 1172 (Del. 1987), the Delaware Supreme Court addressed whether a contract for a turn-key computer system that included software specifically designed for Monteleone's business was a contract for goods or services.
The court held that "when a mixed contract is presented, it is necessary for a court to review the factual circumstances surrounding the negotiation, formation and contemplated performance of the contract to determine whether the contact is predominantly or primarily a contract for the sale of goods." Id. at 1174.
Using this test, the court found that where "the hardware and software elements are combined into a single unit--the computer system--prior to sale, . . . the computer system is predominantly 'goods.'" Id.