Brooks Cotton Company, Inc. v. Bradley F. Williams
2012 Tenn. App. LEXIS 262, 77 U.C.C. Rep. Serv. 2d (West) 493, 381 S.W.3d 414 (2012)
Rule of Law:
A farmer may be considered a 'merchant' under the Uniform Commercial Code Statute of Frauds if the individual possesses sufficient expertise in the sale of crops, but this determination is a mixed question of law and fact based on the farmer's specific experience and activities.
Facts:
- Bradley Williams is a cotton and soybean farmer with twenty-five years of experience and a high school education.
- Brooks Cotton Company alleges that on August 5, 2010, Williams entered into an oral contract over the telephone to sell his entire 2010 cotton production (approximately 1,206 bales) at a specific price.
- Brooks Cotton sent a written confirmation of this alleged agreement to Williams regarding the sale roughly thirty days after the phone call.
- Williams did not sign the confirmation, nor did he send a written objection to the terms within ten days.
- Williams delivered 307 bales of cotton to Brooks Cotton but refused to deliver the remaining production.
- Williams disputed the existence of the oral contract, claiming he only called to discuss prices and arguing that any alleged oral agreement was unenforceable because it was not in writing.
Procedural Posture:
- Brooks Cotton sued Williams in the Chancery Court for Crockett County for specific performance and damages.
- The Chancery Court issued a preliminary injunction on the sale of the cotton.
- Williams filed a motion for summary judgment, arguing he was not a merchant under the U.C.C.
- Brooks Cotton filed a cross-motion for partial summary judgment, arguing Williams was a merchant.
- The Chancery Court granted Brooks Cotton's partial summary judgment, ruling Williams was a merchant, and denied Williams' motion.
- The Chancery Court granted Williams permission to file an interlocutory appeal.
- The Court of Appeals granted the application for interlocutory appeal.
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Issue:
Is a farmer considered a 'merchant' for purposes of the Uniform Commercial Code Statute of Frauds, such that an oral agreement confirmed by a written memorandum is enforceable against them?
Opinions:
Majority - Judge J. Steven Stafford
Yes, a farmer may be considered a merchant, but the determination requires a factual analysis of the specific farmer's business acumen. The court reasoned that the Uniform Commercial Code (U.C.C.) defines a merchant broadly to include almost every person in business who holds themselves out as having knowledge or skill peculiar to the practices involved. While older cases often categorized farmers as simple tillers of the soil, modern commercial farming involves sophisticated marketing and sales. Therefore, a farmer is not automatically excluded from being a merchant. However, because the record showed conflicting evidence regarding Williams's sophistication—he followed markets and had booked cotton before, but did not understand 'hedging' and usually sold after harvest—the court could not rule he was a merchant as a matter of law. Summary judgment was improper because genuine issues of material fact existed regarding his status.
Analysis:
This decision aligns Tennessee with jurisdictions that recognize the evolving nature of agriculture, rejecting the antiquated notion that farmers are merely 'casual sellers' incapable of being merchants. By ruling that merchant status is a mixed question of law and fact, the court prevents a blanket classification, ensuring that only farmers with actual business sophistication are held to the higher standards of the U.C.C. merchant exception. This ruling significantly impacts agricultural litigation, as oral contracts for crop sales may now be enforceable against experienced farmers if the buyer sends a written confirmation that goes unobjected to.
