Merchant
Encyclopedia
A merchant is a businessperson who trade
s in commodities that were produced by others, in order to earn a profit
.
Merchants can be one of two types:
A merchant class characterizes many pre-modern societies. Its status can range from high (the members even eventually achieving titles such as that of Merchant Prince or nabob
) to low, as in Chinese culture, owing to the presumed distastefulness of profiting from "mere" trade
rather than from labor or the labor of others as in agriculture
and craftsmanship.
, "merchant" is defined (under the Uniform Commercial Code
) as any person while engaged in a business or profession or a seller who deals regularly in the type of goods sold. Under the common law
and the Uniform Commercial Code
in the United States
, merchants are held to a higher standard in the selling of products than those who are not engaged in the sale of goods as a profession.
. The Merchant Confirmation Rule states that if one merchant sends a writing sufficient
to satisfy the statute of frauds to another merchant, the merchant has reason to know of the contents of the sent confirmation and the receiver does not object to the confirmation within 10 days, the confirmation is good to satisfy the statute as to both parties.
. When dealing between merchants, the Statute of Frauds will be satisfied so long as it satisfies an authentication under the UCC Section 2-205 (a signature/mark will do). This is called the firm offer
rule. Provided this occurs, the offer will stay 'firm' for a period of 90 days. If the offer is for a longer period courts will limit the offer period to 90 days.
Trade
Trade is the transfer of ownership of goods and services from one person or entity to another. Trade is sometimes loosely called commerce or financial transaction or barter. A network that allows trade is called a market. The original form of trade was barter, the direct exchange of goods and...
s in commodities that were produced by others, in order to earn a profit
Profit (economics)
In economics, the term profit has two related but distinct meanings. Normal profit represents the total opportunity costs of a venture to an entrepreneur or investor, whilst economic profit In economics, the term profit has two related but distinct meanings. Normal profit represents the total...
.
Merchants can be one of two types:
- A wholesaleWholesaleWholesaling, jobbing, or distributing is defined as the sale of goods or merchandise to retailers, to industrial, commercial, institutional, or other professional business users, or to other wholesalers and related subordinated services...
merchant operates in the chain between producer and retail merchant. Some wholesale merchants only organize the movement of goods rather than move the goods themselves. - A retailRetailRetail consists of the sale of physical goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be...
merchant or retailer, sells commodities to consumers (including businesses). A shop owner is a retail merchant.
A merchant class characterizes many pre-modern societies. Its status can range from high (the members even eventually achieving titles such as that of Merchant Prince or nabob
Nawab
A Nawab or Nawaab is an honorific title given to Muslim rulers of princely states in South Asia. It is the Muslim equivalent of the term "maharaja" that was granted to Hindu rulers....
) to low, as in Chinese culture, owing to the presumed distastefulness of profiting from "mere" trade
Trade
Trade is the transfer of ownership of goods and services from one person or entity to another. Trade is sometimes loosely called commerce or financial transaction or barter. A network that allows trade is called a market. The original form of trade was barter, the direct exchange of goods and...
rather than from labor or the labor of others as in agriculture
Agriculture
Agriculture is the cultivation of animals, plants, fungi and other life forms for food, fiber, and other products used to sustain life. Agriculture was the key implement in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that nurtured the...
and craftsmanship.
Significance in law
In the United StatesUnited States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, "merchant" is defined (under the Uniform Commercial Code
Uniform Commercial Code
The Uniform Commercial Code , first published in 1952, is one of a number of uniform acts that have been promulgated in conjunction with efforts to harmonize the law of sales and other commercial transactions in all 50 states within the United States of America.The goal of harmonizing state law is...
) as any person while engaged in a business or profession or a seller who deals regularly in the type of goods sold. Under the common law
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...
and the Uniform Commercial Code
Uniform Commercial Code
The Uniform Commercial Code , first published in 1952, is one of a number of uniform acts that have been promulgated in conjunction with efforts to harmonize the law of sales and other commercial transactions in all 50 states within the United States of America.The goal of harmonizing state law is...
in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, merchants are held to a higher standard in the selling of products than those who are not engaged in the sale of goods as a profession.
Merchant confirmation rule
The UCC also contains a "merchant's confirmation" exception to the Statute of FraudsStatute of frauds
The statute of frauds refers to the requirement that certain kinds of contracts be memorialized in a signed writing with sufficient content to evidence the contract....
. The Merchant Confirmation Rule states that if one merchant sends a writing sufficient
Firm offer rule
Under common law, an offer to purchase can be revoked at anytime before acceptance. However, dealing between merchants, an offer can be made 'firm' or irrevocable for a certain period of time. In order for a merchant to create a 'firm offer' it must satisfy the Statute of FraudsStatute of frauds
The statute of frauds refers to the requirement that certain kinds of contracts be memorialized in a signed writing with sufficient content to evidence the contract....
. When dealing between merchants, the Statute of Frauds will be satisfied so long as it satisfies an authentication under the UCC Section 2-205 (a signature/mark will do). This is called the firm offer
Firm offer
A firm offer means an irrevocable offer made by a merchant. As a general rule, all offers are revocable at any time prior to acceptance, even those offers that purport to be irrevocable on their face...
rule. Provided this occurs, the offer will stay 'firm' for a period of 90 days. If the offer is for a longer period courts will limit the offer period to 90 days.
See also
- Agricultural marketingAgricultural marketingAgricultural marketing covers the services involved in moving an agricultural product from the farm to the consumer. Numerous interconnected activities are involved in doing this, such as planning production, growing and harvesting, grading, packing, transport, storage, agro- and food processing,...
- CapitalismCapitalismCapitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...
- CommerceCommerceWhile business refers to the value-creating activities of an organization for profit, commerce means the whole system of an economy that constitutes an environment for business. The system includes legal, economic, political, social, cultural, and technological systems that are in operation in any...
- DistributionDistribution (business)Product distribution is one of the four elements of the marketing mix. An organization or set of organizations involved in the process of making a product or service available for use or consumption by a consumer or business user.The other three parts of the marketing mix are product, pricing,...
- Free MarketFree marketA free market is a competitive market where prices are determined by supply and demand. However, the term is also commonly used for markets in which economic intervention and regulation by the state is limited to tax collection, and enforcement of private ownership and contracts...
- Free TradeFree tradeUnder a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ from...
- MercantilismMercantilismMercantilism is the economic doctrine in which government control of foreign trade is of paramount importance for ensuring the prosperity and security of the state. In particular, it demands a positive balance of trade. Mercantilism dominated Western European economic policy and discourse from...
- Merchant marine
- Merchant accountMerchant accountA merchant account is a type of bank account that allows businesses to accept payments by debit or credit cards. A merchant account is established under an agreement between an acceptor and a merchant acquiring bank for the settlement of credit card and/or debit card transactions...
- SalesSalesA sale is the act of selling a product or service in return for money or other compensation. It is an act of completion of a commercial activity....
- Service designService designService design is the activity of planning and organizing people, infrastructure, communication and material components of a service in order to improve its quality and the interaction between service provider and customers....
- BazaarBazaarA bazaar , Cypriot Greek: pantopoula) is a permanent merchandising area, marketplace, or street of shops where goods and services are exchanged or sold. The term is sometimes also used to refer to the "network of merchants, bankers and craftsmen" who work that area...