Merchant

Case Activities 7

Some Name

Some College

Case Activities 7

CASE ACTIVITY 23-4, Please consider the question of what factors are considered in determining if this seller is a “merchant?”

"Merchant" means a person who has knowledge or skill and because of his occupation has knowledge or skill that may be attributed to his employment as an agent or broker in that field.  Kallestad had knowledge or skill pertaining to growing and selling grain used for horse feed, he was a merchant (Merchant, n.d.).

In this case, the warranty of merchantability is implied in the sale.  There was no mention of a disclaimer, such as, “as is”, or “with all faults.”  To be merchantable, the goods must conform to a buyer’s expectations.  The state supreme court found no requirement of foreseeability to determine liability for a breach of the UCC’s implied warranty of merchantability (n.d.).

The court explained that the Rothings' purchase of hay from Kallestad was a transaction in goods and if Kallestad was a merchant for purposes of the sale of his hay to the Rothings then the Implied Warranty of Merchantability would apply to this transaction (n.d.).  Under these principles, livestock feed must be not only of the kind and quality ordered by its buyers, but also “free from deleterious substances, poisonous to stock” (Department of Animal Science - Plants Poisonous to Livestock., n.d.).

If Kallestad’s hay could not meet this test, which the facts as stated in the problem seemed to indicate, then he would have breached the implied warranty of merchantability, and the Rothings would likely be entitled to damages for the deaths of their horses and related losses (Clarkson, K.W., Miller, R. L., & Cross, F. B., 2018, 435).

CASE ACTIVITY 33:3, Liability Based on Actual or Apparent Authority. Please focus on the gray zone between what is an agent and what is an independent contractor.

        An agent is an entity that is authorized to act on behalf of another whereas an independent contractor is an entity that provides goods or services to another entity under specific terms set forth in a verbal or written contract (Anderson and Yamada, P.C., n.d.).

The independent contractors should have filed liens before the church made its final payment to NCS. Their liens were not timely. NCS was not the agent of the church.  The church could be held liable to the independent contractors for costs owed to independent contractors by NCS. NCS did not give the church authority to contract on its behalf, and the church did not exercise any authority over the independent contractors. “An agent has apparent authority when the principal, by either words or actions, causes a third party to reasonably believe that the agent has authority to act, even though the agent has no express or implied authority” (Clarkson, K.W., Miller, R. L., & Cross, F. B., 2018, 624).