Legal Definitions - merchant exception

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.