rifon2,
If your friend took money for a knife he is now a merchant.
I don't think that's accurate.
Someone who takes money once or twice - or only very occasionally - IMO is not a "merchant".
It's got to be someone who is, shall we say, "in the business".
FWIW, I found this definition for a "merchant" in the UCC:
§ 2-104. Definitions: "Merchant"...
(1) Merchant" means a person that deals in goods of the kind
or otherwise holds itself out by occupation as having knowledge or skill peculiar to the practices or goods involved in the transaction...
Now, that's some real "legalese", but it seems to me that the definition is saying that a "merchant' is a person who "deals" more than occasionally
with a particular type of goods.
If the knife was lost and the value was only 30.00 as you say then it is automatically covered.
By whom?
It is the senders responsibility to institute the claim with the shipper weather USPS or UPS or Fedx the buyer is unable to iniate claims.
IIRC, I think this is true but I'm not sure.
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I'm not an expert on this stuff by any means!
I'd really like to hear or find some definitive answer, but in the meantime I'm glad Darkfin did the poll so at least we can
get a sense of what people are looking for and expecting in this area.