Lockheed Martin Idaho Technical Company (‘‘LMITCO’’) requested bids for a comprehensive fire alarm system in its twelve buildings located in Idaho Falls. At a prebid meeting, MWE [Mountain West Electric, Inc.] and Fox met and discussed working together on the project. MWE was in the business of installing electrical wiring, conduit and related hookups and attachments. Fox provided services in designing, drafting, testing and assisting in the installation of fire alarm systems, and in ordering specialty equipment necessary for such projects. The parties concluded that it would be more advantageous for them to work together on the project than for each of them to bid separately for the entire job, and they further agreed that Fox would work under MWE. The parties prepared a document defining each of their roles entitled ‘‘Scope and Responsibilities.’’

   Fox prepared a bid for the materials and services that he would provide, which was incorporated into MWE’s bid to LMITCO. MWE was the successful bidder and was awarded the LMITCO fixed price contract. In May 1996, Fox began performing various services at the direction of MWE’s manager. During the course of the project, many changes and modifications to the LMITCO contract were made.

   A written contract was presented to Fox by MWE on August 7, 1996. A dispute between MWE and Fox arose over the procedure for the compensation of the change orders. MWE proposed a flow-down procedure, whereby Fox would receive whatever compensation LMITCO decided to pay MWE. This was unacceptable to Fox. Fox suggested a bidding procedure to which MWE objected. On December 5, 1996, Fox met with MWE to discuss the contract. No compensation arrangement was agreed upon by the parties with respect to change orders. Fox left the project on December 9, 1996, after delivering the remaining equipment and materials to MWE. MWE contracted with Life Safety Systems (‘‘LSS’’) to complete the LMITCO project.

   Fox filed a complaint in July 1998 seeking monetary damages representing money due and owing for materials and services provided by Fox on behalf of MWE. MWE answered and counterclaimed seeking monetary damages resulting from the alleged breach of the parties’ agreement by Fox.

   Following a court trial, the district court found that an implied-in-fact contract existed between the parties based on the industry standard’s flow-down method of compensation. The court found in favor of MWE. * * * Fox appeals.

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Implied-in-Fact Contract
                   * * *

   This Court has recognized three types of contractual relationships:

First is the express contract wherein the parties expressly agree regarding a transaction. Secondly, there is the implied in fact contract wherein there is no express agreement, but the conduct of the parties implies an agreement from which an obligation in contract exists. The third category is called an implied in law contract, or quasi contract. However, a contract implied in law is not a contract at all, but an obligation imposed by law for the purpose of bringing about justice and equity without reference to the intent or the agreement of the parties and, in some cases, in spite of an agreement between the parties. It is a non-contractual obligation that is to be treated procedurally as if it were a contract, and is often refered (sic) to as quasi contract, unjust enrichment, implied in law contract or restitution.
[Citation.]

   ‘‘An implied in fact contract is defined as one where the terms and existence of the contract are manifested by the conduct of the parties with the request of one party and the performance by the other often being inferred from the circumstances attending the performance.’’ [Citation.] The implied-in-fact contract is grounded in the parties’ agreement and tacit understanding. [Citation.] ‘‘The general rule is that where the conduct of the parties allows the dual inferences that one performed at the other’s request and that the requesting party promised payment, then the court may find a contract implied in fact.’’ [Citations.]

   [UCC §] 1–205(1) defines ‘‘course of dealing’’ as ‘‘a sequence of previous conduct between the parties to a particular transaction which is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct.’’

* * *

   Although the procedure was the same for each change order, in that MWE would request a pricing from Fox for the work, which was then presented to LMITCO, each party treated the pricings submitted by Fox for the change orders in a different manner. This treatment is not sufficient to establish a meeting of the minds or to establish a course of dealing when there was no ‘‘common basis of understanding for interpreting [the parties’] expressions’’ under [UCC §] 1–205(1).

   * * After a review of the record, it appears that the district court’s findings are supported by substantial and competent, albeit conflicting, evidence. This Court will not substitute its view of the facts for the view of the district court.

   Using the district court’s finding that pricings submitted by Fox were used by MWE as estimates for the change orders, the conclusion made by the district court that an implied-in-fact contract allowed for the reasonable compensation of Fox logically follows and is grounded in the law in Idaho. [Citation.]

   This Court holds that the district court did not err in finding that there was an implied-in-fact contract using the industry standard’s flow-down method of compensation for the change orders rather than a series of fixed price contracts between MWE and Fox.

Uniform Commercial Code
Fox contends that the district court erred by failing to consider previous drafts of the proposed contract between the parties to determine the terms of the parties’ agreement. Fox argues the predominant factor of this transaction was the fire alarm system, not the methodology of how the system was installed, which would focus on the sale of goods and, therefore, the Uniform Commercial Code (‘‘UCC’’) should govern. Fox argues that in using the UCC various terms were agreed upon by the parties in the prior agreement drafts, including terms for the timing of payments, payments to Fox’s suppliers and prerequisites to termination.

   MWE contends that the UCC should not be used, despite the fact that goods comprised one-half of the contract price, because the predominant factor at issue is services and not the sale of goods. MWE points out that the primary issue is the value of Fox’s services under the change orders and the cost of obtaining replacement services after Fox left the job. MWE further argues that the disagreement between the parties over material terms should prevent the court from using UCC gap fillers. Rather, MWE contends the intent and relationship of the parties should be used to resolve the conflict.

   This Court in [citation], pointed out ‘‘in determining whether the UCC applies in such cases, a majority of courts look at the entire transaction to determine which aspect, the sale of goods or the sale of services, predominates.’’ [Citation.] It is clear that if the underlying transaction to the contract involved the sale of goods, the UCC would apply. [Citation.] However, if the contract only involved services, the UCC would not apply. [Citation.] This Court has not directly articulated the standard to be used in mixed sales of goods and services, otherwise known as hybrid transactions.

   The Court of Appeals in Pittsley v. Houser, [citation], focused on the applicability of the UCC to hybrid transactions. The court held that the trial court must look at the predominant factor of the transaction to determine if the UCC applies. [Citation.]

   The test for inclusion or exclusion is not whether they are mixed, but, granting that they are mixed, whether their predominant factor, their thrust, their purpose, reasonably stated, is the rendition of service, with goods incidentally involved (e.g., contract with artist for painting) or is a transaction of sale, with labor incidentally involved (e.g., installation of a water heater in a bathroom). This test essentially involves consideration of the contract in its entirety, applying the UCC to the entire contract or not at all.

    [Citation.] This Court agrees with the Court of Appeals’ analysis and holds that the predominant factor test should be used to determine whether the UCC applies to transactions involving the sale of both goods and services.

   One aspect that the Court of Appeals noted in its opinion in Pittsley, in its determination that the predominant factor in that case was the sale of goods, was that the purchaser was more concerned with the goods and less concerned with the installation, either who would provide it or the nature of the work. MWE and Fox decided to work on this project together because of their differing expertise. MWE was in the business of installing electrical wiring, while Fox designed, tested and assisted in the installation of fire alarm systems, in addition to ordering specialty equipment for fire alarm projects.

   The district court found that the contract at issue in this case contained both goods and services; however, the predominant factor was Fox’s services. The district court found that the goods provided by Fox were merely incidental to the services he provided, and the UCC would provide no assistance in interpreting the parties’ agreement.

   This Court holds that the district court did not err in finding that the predominant factor of the underlying transaction was services and that the UCC did not apply.

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   This Court affirms the decision of the district court.