3L Communications (3L) is a merchant that sells high-end optical telecommunications equipment. Jodi Merola is a sole proprietor doing business as “NY Telecom Supply” (Merola). In summary, 3L entered into an agreement with Merola to purchase five optical circuit boards. Merola shipped the circuit boards via Federal Express, with the balance of $35,090 due on delivery in the form of a cashier’s check. The circuit boards arrived at 3L’s office and were paid for as agreed, but upon further inspection of the boards, 3L discovered that they were damaged. 3L immediately contacted Merola and notified her that the boards were unusable. In response, Merola provided shipping instructions and an account number to be used for returning the goods. 3L followed the shipping instructions and, two weeks later, 3L sent an e-mail message to Merola regarding the refund for the boards. Merola responded that she had not received the returned boards. 3L then supplied Merola with tracking information from the carrier that indicated that the boards had been delivered two weeks earlier. After Merola stopped responding to 3L inquiries, 3L filed suit to recover its $35,090 payment. Among other things, Merola argued that she was not a “merchant” for purposes of the UCC because she operated as a sole proprietor out of her home.

CASE QUESTIONS

1. Is Merola a merchant under the UCC? Why or why not?

2. Either way, should someone who has minimal business experience or education be held to the standard of a merchant?