Case Study: Rush Johnson Farms Inc. V. Missouri Farms Association

Facts of the Case:

The case was presented for the first time in Missouri to determine whether or not a farmer may be considered a "merchant" under the Uniform Commercial Code, § 400.2-201, RSMo 1969.

In the case, Rush Johnson Farms was the plaintiff while the Missouri Farmers Association (MFA) was the defendant. A suit was brought against the MFA by Johnson for $4,094.60, the remaining balance owed to him for the sale of soy beans to MFA. The case was held at the Circuit Court in the state of Missouri, where the MFA put forth that Johnson had entered a contract for the delivery of 6,000 bushels of beans, but failed to deliver the entire amount; therefore Johnson received only the sum for the soybeans that were actually delivered. Johnson defended his position that the contract between them was oral, the exact quantity of beans was not captured and the MFA could not prove otherwise under UCC 400.2-201, since any transaction above $500 was not confirmed in writing.

MFA argued that Johnson fell under UCC § 400.2-104, which states:

The term "merchant" as defined here roots in the "law merchant" concept of a professional in business. The professional status under the definition may be based upon specialized knowledge as to the goods, specialized knowledge as to business practices, or specialized knowledge as to both and which kind of specialized knowledge may be sufficient to establish the merchant status is indicated by the nature of the provisions.

Missouri Farmers Association countered the arguments of Johnson by stating that Johnson was involved as a merchant according to the code definition and the oral contract became admissible under the subsection 2 of 400.2-201.

Issues in the Case:

The issues identified in this case are the following:

1. The first issue is to determine if Johnson, who is a farmer, falls under the UCC definition of a "merchant."

2. The second issue in this case, is whether the oral contract between the two parties of 600 bushes at the...