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The Court of Appeals of Tennessee, at Jackson, construes the definition of merchant broadly for purposes of the Statute of Frauds, encompassing almost every person in business, including an experienced commercial farmer. Tenn. Code. Ann. § 47-2-104, cmt. 2. A farmer may be considered a merchant for the purposes of the merchant exception to the Statute of Frauds, when the farmer possesses sufficient expertise in not only the cultivation, but also the sale of crops. However, the determination of whether a particular farmer is a merchant is a mixed question of fact and law, which must be determined on a case-by-case basis, taking into account the individual experience and activities of the person involved. Trial courts should consider the following, nonexhaustive, criteria in determining whether a particular farmer is a merchant for purposes of the Statute of Frauds: (1) the length of time the farmer has been engaged in the practice of selling his product to the marketers of his product; (2) the degree of business acumen shown by the farmer in his dealings with other parties; (3) the farmer's awareness of the operation and existence of farm markets; and (4) the farmer's past experience with or knowledge of the customs and practices which are unique to the particular marketing of the product which he sells.
Appellant farmer allegedly entered into an oral contract to sell his cotton crop to Appellee cotton company. The farmer failed to deliver the cotton and the cotton company sued for specific performance. The farmer defended the suit by arguing that the alleged oral contract was unenforceable due to the Statute of Frauds. The cotton company countered that the farmer was a merchant for purposes of the merchant exception to the Statute of Frauds. The trial court granted partial summary judgment in favor of the cotton company, finding that the farmer was a merchant for purposes of the Statute of Frauds. Appellant farmer challenged the decision.
The court held that pursuant to Tenn. Code Ann. § 47-2-104(1), a farmer may be considered a merchant for purposes of the merchant exception to the Uniform Commercial Code Statute of Frauds, Tenn. Code Ann. § 47-2-201(2), when the farmer possessed sufficient expertise in not only the cultivation, but also the sale of crops. However, because the question of whether the appellant farmer qualified as a merchant raised genuine issues regarding the inferences to be drawn from the facts, summary judgment was inappropriate in an action for specific performance, injunctive relief, and damages by plaintiff cotton company.