American Contract Law for a Global Age, 2017a

[T]he plain reading of the statute excludes the finding of any implied warranty
since UCC § 2–314 (1979) applies only to sales made by a “merchant with respect to
goods of that kind.” UCC § 2–104 defines merchant as:
“Merchant” means a person who deals in goods of the kind or
otherwise by his occupation holds himself out as having knowledge or
skill peculiar to the practices or goods involved in the transaction or to
whom such knowledge or skill may be attributed by his employment of
an agent or broker or other intermediary who by his occupation holds
himself out as having such knowledge or skill.
From the undisputed testimony in the record, it is clear that the defendants, Dayton
Bank & Trust Company and Homer Mayfield, are not merchants within the meaning
of the statute.
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Review Question 1. Courts are not always helpful in articulating their
reasoning, and here the Foley court seemed to think it self-evident why Dayton Bank
& Trust was not a merchant against whom the implied warranty of merchantability
would operate. Why exactly is a bank—generally considered a sophisticated
commercial party—not a “merchant” for purposes of this case? Carefully read the
quoted text of the definition of “merchant” in UCC § 2-104(1).
Review Question 2. Burge is annoyingly fond of a sing-song saying that “only
a merchant has the ability to imply the warranty of merchantability.” Is that
statement correct? Read UCC § 2-314 and see if you can explain what quality of goods
are implied when goods are sold by a merchant. Can you see why parties get in legal
battles over whether a seller is or is not a merchant? The Gared Holdings case that
follows may help you answer this question.
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CRONE, J.
GARED HOLDINGS, LLC v. BEST BOLT PRODUCTS, INC.
Court of Appeals of Indiana.
991 N.E.2d 1005 (Ind. Ct. App. 2013)
Facts and Procedural History
Best Bolt primarily sells fasteners, such as “bolts, nuts and screws and
miscellaneous hardware items.” Best Bolt is a distributor; it does not manufacture
the products that it sells. Sometime in 2006, Curtis Sparks, a salesman for Best Bolt,
noticed that Gared Holdings had playground equipment outside its facility and
thought that Gared could be a potential customer. Sparks stopped in and introduced
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198 CHAPTER IV: ALTERNATIVE REGIMES