January 25, 2010 - Introduced by Representatives Cullen and Townsend,
cosponsored by Senators Risser and Taylor. Referred to Committee on
Financial Institutions.
AB687,1,6 1An Act to amend 59.43 (1) (L), 59.43 (1) (n), 126.25 (11), 137.12 (2) (b), 137.24
2(4), 340.01 (56o), 342.03, 402.202 (1), 402.208 (2), 403.103 (1) (j), 407.102 (1) (e),
3407.103 (2), 410.106 (1), 410.204 (2), 411.501 (4), 706.08 (4) (c) and 893.36 (1g)
4(a); and to repeal and recreate chapter 401 of the statutes; relating to:
5adopting revised article 1 of the Uniform Commercial Code concerning general
6provisions.
Analysis by the Legislative Reference Bureau
This bill repeals and recreates the general provisions chapter of the Uniform
Commercial Code (UCC). The UCC governs certain transactions relating to sales,
negotiable instruments, bank deposits and collections, letters of credit, bulk
transfers, documents of title, investment securities, secured transactions, fund
transfers, and leases. The bill revises and updates the general provisions chapter
to better reflect and accommodate changing business practices. The bill also makes
many changes of a technical or nonsubstantive nature, such as reordering and
renumbering sections. In terms of substantive changes to the general provisions
chapter of the UCC, the bill does all of the following:
1. Clarifies that the general provisions chapter applies only to transactions
governed by the UCC and not by other law.
2. Clarifies when other principles of law may be used to supplement UCC
provisions of law.

3. Specifically provides that evidence of "course of performance" may be used
to interpret a contract along with course of dealing and usage of trade.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB687, s. 1 1Section 1. 59.43 (1) (L) of the statutes is amended to read:
AB687,2,62 59.43 (1) (L) File all documents pertaining to security interests, as defined in
3s. 401.201 (37) (a) (2) (t), that are required or authorized by law to be filed with the
4register. Except as otherwise prescribed by the department of financial institutions
5under subch. V of ch. 409, these documents shall be executed in a manner that
6satisfies the requirements set forth in sub. (2m) (b) 1. to 5.
AB687, s. 2 7Section 2. 59.43 (1) (n) of the statutes is amended to read:
AB687,2,118 59.43 (1) (n) Upon the filing of a financing statement or other document
9evidencing the creation of a security interest, as defined in s. 401.201 (37) (a) (2) (t),
10required to be filed or recorded with the register under s. 409.501 (1) (a), index the
11statement or document in the real estate records index under sub. (9).
AB687, s. 3 12Section 3. 126.25 (11) of the statutes is amended to read:
AB687,2,1413 126.25 (11) "Warehouse receipt" means a receipt for grain, issued by a grain
14warehouse keeper, that is also a document of title under s. 401.201 (15) (2) (i).
AB687, s. 4 15Section 4. 137.12 (2) (b) of the statutes is amended to read:
AB687,2,1716 137.12 (2) (b) Chapters 401 and 403 to 410, other than ss. 401.107 and 401.206
17s. 401.306.
AB687, s. 5 18Section 5. 137.24 (4) of the statutes is amended to read:
AB687,3,519 137.24 (4) Except as otherwise agreed, a person having control of a transferable
20record is the holder, as defined in s. 401.201 (20) (2) (km), of the transferable record
21and has the same rights and defenses as a holder of an equivalent record or writing

1under chs. 401 to 411, including, if the applicable statutory requirements under s.
2403.302 (1), 407.501, or 409.330 are satisfied, the rights and defenses of a holder in
3due course, a holder to which a negotiable record of title has been duly negotiated,
4or a purchaser, respectively. Delivery, possession, and endorsement are not required
5to obtain or exercise any of the rights under this subsection.
AB687, s. 6 6Section 6. 340.01 (56o) of the statutes is amended to read:
AB687,3,87 340.01 (56o) "Security interest" means a security interest as defined in s.
8401.201 (37) (2) (t).
AB687, s. 7 9Section 7. 342.03 of the statutes is amended to read:
AB687,3,15 10342.03 Motor vehicle, trailer or semitrailer leases. Notwithstanding s.
11401.201 (37) (2) (t) or ch. 409, a transaction involving a motor vehicle, trailer or
12semitrailer does not create a conditional sale or a security interest merely because
13it includes a provision that permits or requires the rental price to be adjusted under
14the agreement by reference to the amount realized upon the sale or other disposition
15of the motor vehicle, trailer or semitrailer.
AB687, s. 8 16Section 8. Chapter 401 of the statutes is repealed and recreated to read:
AB687,3,1717 CHAPTER 401
AB687,3,1818 Uniform commercial code
AB687,3,19 19— General provisions
AB687,3,2020 Subchapter I
AB687,3,2121 General provisions
AB687,3,23 22401.101 Short titles. (1) Chapters 401 to 411 may be cited as the uniform
23commercial code.
AB687,3,25 24(2) This chapter may be cited as uniform commercial code — general
25provisions.
AB687,4,2
1401.102 Scope of chapter. This chapter applies to a transaction to the extent
2that it is governed by another chapter in chs. 402 to 411.
AB687,4,6 3401.103 Construction of uniform commercial code to promote its
4purposes and policies; applicability of supplemental principles of law.
(1)
5Chapters 401 to 411 must be liberally construed and applied to promote its
6underlying purposes and policies, which are all of the following:
AB687,4,87 (a) To simplify, clarify, and modernize the law governing commercial
8transactions.
AB687,4,109 (b) To permit the continued expansion of commercial practices through custom,
10usage, and agreement of the parties.
AB687,4,1111 (c) To make uniform the law among the various jurisdictions.
AB687,4,16 12(2) Unless displaced by the particular provisions of chs. 401 to 411, the
13principles of law and equity, including the law merchant and the law relative to
14capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress,
15coercion, mistake, bankruptcy, or other validating or invalidating cause shall
16supplement its provisions.
AB687,4,20 17401.104 Construction against implied repeal. Chapters 401 to 411 being
18a general act intended as a unified coverage of its subject matter, no part of it shall
19be deemed to be impliedly repealed by subsequent legislation if such construction can
20reasonably be avoided.
AB687,4,22 21401.106 Use of singular and plural; gender. In chs. 401 to 411, unless the
22statutory context otherwise requires, all of the following apply:
AB687,4,24 23(1) Words in the singular number include the plural, and those in the plural
24include the singular.
AB687,4,25 25(2) Words of any gender also refer to any other gender.
AB687,5,2
1401.107 Captions. Section captions are part of chs. 401 to 411,
2notwithstanding s. 990.001 (6).
AB687,5,33 Subchapter Ii
AB687,5,54 GENERAL DEFINITIONS AND
5 PRINCIPLES OF INTERPRETATION
AB687,5,9 6401.201 General definitions. (1) Unless the context otherwise requires,
7words or phrases defined in this section, or in the additional definitions contained
8in chs. 402 to 411 that apply to particular chapters or subchapters thereof, have the
9meanings stated.
AB687,5,11 10(2) Subject to definitions contained in chs. 402 to 411 that apply to particular
11chapters or subchapters thereof, in chs. 401 to 411:
AB687,5,1412 (a) "Action," in the sense of a judicial proceeding, includes recoupment,
13counterclaim, setoff, suit in equity, and any other proceeding in which rights are
14determined.
AB687,5,1515 (am) "Aggrieved party" means a party entitled to pursue a remedy.
AB687,5,1816 (b) "Agreement" means the bargain of the parties in fact, as found in their
17language or inferred from other circumstances, including course of performance,
18course of dealing, or usage of trade as provided in s. 401.303. (Compare "Contract.")
AB687,5,2019 (c) "Bank" means a person engaged in the business of banking and includes a
20savings bank, savings and loan association, credit union, and trust company.
AB687,5,2321 (cm) "Bearer" means a person in control of a negotiable electronic document of
22title or person in possession of an instrument, negotiable tangible document of title,
23or certificated security payable to bearer or endorsed in blank.
AB687,6,3
1(d) "Bill of lading" means a document of title evidencing the receipt of goods for
2shipment issued by a person engaged in the business of directly or indirectly
3transporting or forwarding goods. The term does not include a warehouse receipt.
AB687,6,44 (dm) "Branch" includes a separately incorporated foreign branch of a bank.
AB687,6,65 (e) "Burden of establishing" a fact means the burden of persuading the trier of
6fact that the existence of the fact is more probable than its nonexistence.
AB687,6,217 (em) "Buyer in ordinary course of business" means a person that buys goods in
8good faith, without knowledge that the sale violates the rights of another person in
9the goods, and in the ordinary course from a person, other than a pawnbroker, in the
10business of selling goods of that kind. A person buys goods in the ordinary course if
11the sale to the person comports with the usual or customary practices in the kind of
12business in which the seller is engaged or with the seller's own usual or customary
13practices. A person that sells oil, gas, or other minerals at the wellhead or minehead
14is a person in the business of selling goods of that kind. A buyer in ordinary course
15of business may buy for cash, by exchange of other property, or on secured or
16unsecured credit, and may acquire goods or documents of title under a preexisting
17contract for sale. Only a buyer that takes possession of the goods or has a right to
18recover the goods from the seller under ch. 402 may be a buyer in ordinary course of
19business. A person that acquires goods in a transfer in bulk or as security for or in
20total or partial satisfaction of a money debt is not a buyer in ordinary course of
21business.
AB687,6,2522 (f) "Conspicuous," with reference to a term, means so written, displayed, or
23presented that a reasonable person against which it is to operate ought to have
24noticed it. Whether a term is "conspicuous" or not is a decision for the court.
25Conspicuous terms include any of the following:
AB687,7,2
11. A heading in capitals equal to or greater in size than the surrounding text,
2or in contrasting type, font, or color to the surrounding text of the same or lesser size.
AB687,7,63 2. Language in the body of a record or display in larger type than the
4surrounding text, or in contrasting type, font, or color to the surrounding text of the
5same size, or set off from surrounding text of the same size by symbols or other marks
6that call attention to the language.
AB687,7,87 (fm) "Consumer" means an individual who enters into a transaction primarily
8for personal, family, or household purposes.
AB687,7,119 (g) "Contract" means the total legal obligation that results from the parties'
10agreement as determined by chs. 401 to 411 as supplemented by any other applicable
11laws. (Compare "Agreement.")
AB687,7,1512 (gm) "Creditor" includes a general creditor, a secured creditor, a lien creditor,
13and any representative of creditors, including an assignee for the benefit of creditors,
14a trustee in bankruptcy, a receiver in equity, and an executor or administrator of an
15insolvent debtor's or assignor's estate.
AB687,7,1716 (h) "Defendant" includes a person in the position of defendant in a counterclaim
17or 3rd party claim.
AB687,7,2018 (hm) "Delivery" with respect to electronic documents of title means voluntary
19transfer of control and with respect to instruments, tangible documents of title,
20chattel paper, or certificated securities means voluntary transfer of possession.
AB687,8,621 (i) "Document of title" means a record that in the regular course of business or
22financing is treated as adequately evidencing that the person in possession or control
23of the record is entitled to receive, control, hold, and dispose of the record and the
24goods the record covers; and that purports to be issued by or addressed to a bailee and
25to cover goods in the bailee's possession which are either identified or are fungible

1portions of an identified mass. The term includes a bill of lading, transport
2document, dock warrant, dock receipt, warehouse receipt, and order for delivery of
3goods. An electronic document of title is evidenced by a record consisting of
4information stored in an electronic medium. A tangible document of title is
5evidenced by a record consisting of information that is inscribed on a tangible
6medium.
AB687,8,77 (im) "Fault" means a wrongful act, omission, breach, or default.
AB687,8,88 (j) "Fungible goods" means any of the following:
AB687,8,109 1. Goods of which any unit, by nature or usage of trade, is the equivalent of any
10other like unit.
AB687,8,1111 2. Goods which by agreement are treated as equivalent.
AB687,8,1212 (jm) "Genuine" means free of forgery or counterfeiting.
AB687,8,1413 (k) "Good faith," except as otherwise provided in ch. 405, means honesty in fact
14and the observance of reasonable commercial standards of fair dealing.
AB687,8,1515 (km) "Holder" means any of the following:
AB687,8,1716 1. The person in possession of a negotiable instrument that is payable either
17to bearer or to an identified person that is the person in possession.
AB687,8,1918 2. A person in possession of a document of title if the goods are deliverable
19either to bearer or to the order of the person in possession.
AB687,8,2020 3. A person in control of a negotiable electronic document of title.
AB687,8,2321 (L) "Insolvency proceeding" includes an assignment for the benefit of creditors
22or other proceeding intended to liquidate or rehabilitate the estate of the person
23involved.
AB687,8,2424 (Lm) "Insolvent" means any of the following:
AB687,9,2
11. Having generally ceased to pay debts in the ordinary course of business other
2than as a result of bona fide dispute.
AB687,9,33 2. Unable to pay debts as they become due.
AB687,9,44 3. Insolvent within the meaning of federal bankruptcy law.
AB687,9,85 (m) "Money" means a medium of exchange currently authorized or adopted by
6a domestic or foreign government. The term includes a monetary unit of account
7established by an intergovernmental organization or by agreement between 2 or
8more countries.
AB687,9,99 (mm) "Organization" means a person other than an individual.
AB687,9,1110 (n) "Party," as distinct from a "3rd party," means a person that has engaged in
11a transaction or made an agreement subject to chs. 401 to 411.
AB687,9,1512 (nm) "Person" means an individual, corporation, business trust, estate, trust,
13partnership, limited liability company, association, joint venture, government,
14governmental subdivision, agency, or instrumentality, public corporation, or any
15other legal or commercial entity.
AB687,9,2116 (p) "Present value" means the amount as of a date certain of one or more sums
17payable in the future, discounted to the date certain by use of either an interest rate
18specified by the parties if that rate is not manifestly unreasonable at the time the
19transaction is entered into or, if an interest rate is not so specified, a commercially
20reasonable rate that takes into account the facts and circumstances at the time the
21transaction is entered into.
Loading...
Loading...