Nebraska Uniform Commercial Code 2-104
- Uniform Commercial Code
Definitions; merchant; between merchants; financing agency.
(1) "Merchant" means a person who deals in goods of the kind or otherwise by his or her occupation holds himself or herself out as having knowledge or skill peculiar to the practices or goods involved in the transaction or to whom such knowledge or skill may be attributed by his or her employment of an agent or broker or other intermediary who by his or her occupation holds himself or herself out as having such knowledge or skill.
(2) "Financing agency" means a bank, finance company, or other person who in the ordinary course of business makes advances against goods or documents of title or who by arrangement with either the seller or the buyer intervenes in ordinary course to make or collect payment due or claimed under the contract for sale, as by purchasing or paying the seller's draft or making advances against it or by merely taking it for collection whether or not documents of title accompany or are associated with the draft. "Financing agency" includes also a bank or other person who similarly intervenes between persons who are in the position of seller and buyer in respect to the goods (section 2-707).
(3) "Between merchants" means in any transaction with respect to which both parties are chargeable with the knowledge or skill of merchants.
- Laws 1963, c. 544, Art. II, § 2-104, p. 1708;
- Laws 2005, LB 570, § 31.
Under subsection (1) of this section, one who engages in the business of purchasing and selling corn is a merchant. Laird v. Scribner Coop, 237 Neb. 532, 466 N.W.2d 798 (1991).
Experienced grain farmers who regularly grow and market grain on the open market as the principal means of providing for their livelihood and by reason of such occupation have acquired and possess knowledge or skill peculiar to the practices and operations of grain marketing are merchants within the meaning of section 2-201 and this section. Agrex, Inc. v. Schrant, 221 Neb. 604, 379 N.W.2d 751 (1986).
Prior Uniform Statutory Provision: None. But see sections 15(2), (5), 16(c), 45(2), and 71, Uniform Sales Act, and sections 35 and 37, Uniform Bills of Lading Act for examples of the policy expressly provided for in this article.
1. This article assumes that transactions between professionals in a given field require special and clear rules which may not apply to a casual or inexperienced seller or buyer. It thus adopts a policy of expressly stating rules applicable "between merchants" and "as against a merchant" wherever they are needed instead of making them depend upon the circumstances of each case as in the statutes cited above. This section lays the foundation of this policy by defining those who are to be regarded as professionals or "merchants" and by stating when a transaction is deemed to be "between merchants".
2. The term "merchant" as defined here roots in the "law merchant" concept of a professional in business. The professional status under the definition may be based upon specialized knowledge as to the goods, specialized knowledge as to business practices, or specialized knowledge as to both and which kind of specialized knowledge may be sufficient to establish the merchant status is indicated by the nature of the provisions.
The special provisions as to merchants appear only in this article and they are of three kinds. Sections 2-201(2), 2-205, 2-207, and 2-209 dealing with the statute of frauds, firm offers, confirmatory memoranda, and modification rest on normal business practices which are or ought to be typical of and familiar to any person in business. For purposes of these sections almost every person in business would, therefor, be deemed to be a "merchant" under the language "who ... by his occupation holds himself out as having knowledge or skill peculiar to the practices ... involved in the transaction ..." since the practices involved in the transaction are nonspecialized business practices such as answering mail. In this type of provision, banks or even universities, for example, well may be "merchants". But even these sections only apply to a merchant in his or her mercantile capacity; a lawyer or bank president buying fishing tackle for his or her own use is not a merchant.
On the other hand, in section 2-314 on the warranty of merchantability, such warranty is implied only "if the seller is a merchant with respect to goods of that kind". Obviously this qualification restricts the implied warranty to a much smaller group than everyone who is engaged in business and requires a professional status as to particular kinds of goods. The exception in section 2-402(2) for retention of possession by a merchant seller falls in the same class; as does section 2-403(2) on entrusting of possession to a merchant "who deals in goods of that kind".
A third group of sections includes 2-103(1)(b), which provides that in the case of a merchant "good faith" includes observance of reasonable commercial standards of fair dealing in the trade; 2-327(1)(c), 2-603, and 2-605, dealing with responsibilities of merchant buyers to follow seller's instructions, etc.; 2-509 on risk of loss, and 2-609 on adequate assurance of performance. This group of sections applies to persons who are merchants under either the "practices" or the "goods" aspect of the definition of merchant.
3. The "or to whom such knowledge or skill may be attributed by his employment of an agent or broker ..." clause of the definition of merchant means that even persons such as universities, for example, can come within the definition of merchant if they have regular purchasing departments or business personnel who are familiar with business practices and who are equipped to take any action required.
Point 1: See sections 1-102 and 1-203.
Point 2: See sections 2-314, 2-315, and 2-320 to 2-325 of this article and article 9.
Definitional Cross References:
"Bank". Section 1-201.
"Buyer". Section 2-103.
"Contract for sale". Section 2-106.
"Document of title". Section 1-201.
"Draft". Section 3-104.
"Goods". Section 2-105.
"Person". Section 1-201.
"Purchase". Section 1-201.
"Seller". Section 2-103.