Merchant

The merchant is a core concept of commercial law, because many rules apply only to merchants. Under TCC Article 12, a person who operates a commercial enterprise in their own name, even partly, is a merchant. A person who announces that they have opened a commercial enterprise is deemed a merchant even if they do not actually operate it.

Who Is a Merchant?

• Natural persons: Those operating, in their own name, a commercial enterprise exceeding the scale of a tradesperson’s business.
• Commercial companies: Joint stock companies, limited liability companies, general and limited partnerships and cooperatives (TCC Article 16).
• Certain legal entities: Associations, foundations and public entities operating commercial enterprises, under the conditions set by law.

Consequences of Merchant Status

• Subject to bankruptcy for all debts (TCC Article 18(1))
• Must choose a trade name, register with the trade registry and keep commercial books
• Must act as a prudent businessperson (TCC Article 18(2))
• Notices between merchants to put the other party in default, terminate or rescind must be sent through a notary, by registered letter, telegram or registered electronic mail (KEP) with a secure electronic signature (TCC Article 18(3))
• Cannot seek reduction of an excessive contractual penalty (TCC Article 22)
• Entitled to a fee for services and interest on advances (TCC Article 20)
• Must object to invoices and confirmation letters within eight days; see Objection to Invoice

Relationship with Commercial Transactions

A merchant’s debts are presumed commercial; see Commercial Transaction. This affects matters ranging from interest rates and limitation periods to the competent court. For disputes between merchants before the commercial courts see Commercial Case.