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Simple English definitions for legal terms
merchant exception
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A quick definition of merchant exception:
Merchant Exception: When merchants make a deal to sell goods, they usually need to write down the agreement to make it official. But if they don't write it down right away, they can still enforce the agreement if they send a written confirmation of the terms within a reasonable time and the other merchant doesn't object within ten days. This means that even if there's no written agreement, the merchants can still hold each other accountable for keeping their promises. However, they still need to prove that they actually made the agreement in the first place.
A more thorough explanation:
The merchant exception is a rule that applies to contracts for the sale of goods between merchants. It allows an oral agreement to be enforceable if a written confirmation of the terms is sent within a reasonable time and the recipient does not object within ten days of receiving it.
For example, if a car dealer and a parts supplier agree on a price for a shipment of parts over the phone, the parts supplier can send a written confirmation of the agreement to the car dealer. If the car dealer does not object within ten days, the agreement is enforceable even though it was not in writing originally.
It's important to note that the merchant exception only applies to the statute of frauds, which requires certain contracts to be in writing to be enforceable. The parties still need to prove that an agreement was reached.