## Facts

- Decatur Cooperative Association operated a Kansas grain elevator, buying grain from farmers and reselling to terminal elevators; it claimed a policy of immediate resale and no speculation.
- Decatur alleged that on July 26, 1973, it orally agreed with Franklin Urban, a wheat farmer, to buy 10,000 bushels of wheat at $2.86 per bushel.
- Decatur asserted it promptly resold the wheat to a terminal elevator in reliance on Urban’s promise.
- On August 14, 1973, Urban refused to deliver and denied a binding purchase agreement.
- Decatur sued for possession (specific performance) or, alternatively, damages for nondelivery.
- Urban raised UCC § 2-201 (statute of frauds) and moved for summary judgment; the parties stipulated to relevant facts for purposes of that motion.
- The district court granted summary judgment for Urban, concluding the alleged oral contract was unenforceable under the UCC statute of frauds.
- Decatur appealed to the Kansas Supreme Court.

## Issues

1. Whether Urban, as a farmer selling his own wheat, was a “merchant” under UCC § 2-104 so that the “between merchants” confirmation rule could remove the oral agreement from the statute of frauds.
2. Whether promissory estoppel could preclude Urban from asserting the UCC statute of frauds as a defense where Decatur alleged foreseeable reliance on Urban’s oral promise.

## Decision

- The Kansas Supreme Court held Urban was not a UCC “merchant” based solely on selling his own farm production.
- The court held Decatur alleged facts that, if proven, could support promissory estoppel sufficient to bar Urban’s statute-of-frauds defense.
- The court reversed summary judgment for Urban and remanded for further proceedings on Decatur’s estoppel theory.

## Legal Principles

- A farmer selling his own crops is not automatically a “merchant” under UCC § 2-104; merchant status generally requires dealing in goods of the kind as a business or holding oneself out as having specialized knowledge or skill in the trade.
- Under UCC § 2-201, an oral contract for the sale of goods priced at $500 or more is generally unenforceable absent a sufficient signed writing, unless an exception applies.
- Promissory estoppel may preclude use of the statute of frauds as a defense when there is a clear promise, reasonable and foreseeable reliance, and enforcement is necessary to avoid injustice.
- Summary judgment is improper where alleged reliance and the need to enforce the promise to prevent injustice present material factual questions.

## Conclusion

The court rejected treating a farmer as a UCC merchant for statute-of-frauds exceptions, but allowed the buyer to proceed on a promissory-estoppel theory that could prevent the farmer from relying on the statute of frauds to defeat an allegedly relied-upon oral wheat sale.


Decatur Coop. Ass’n v. Urban, 547 P.2d 323 (Kan. 1976)