Amendment ASA1-AB480

AB480-ASA1,11,24 (wm) "Warehouse receipt" means a receipt issued by a person engaged in the business of storing goods for hire.

AB480-ASA1,12,2 (x) "Writing" includes printing, typewriting, or any other intentional reduction to tangible form. "Written" has a corresponding meaning.

AB480-ASA1,12,4 401.202 Notice; knowledge. (1) Subject to sub. (6), a person has "notice" of a fact if the person satisfies any of the following:

AB480-ASA1,12,5 (a) Has actual knowledge of it.

AB480-ASA1,12,6 (b) Has received a notice or notification of it.

AB480-ASA1,12,8 (c) From all the facts and circumstances known to the person at the time in question, has reason to know that it exists.

AB480-ASA1,12,9 (2) "Knowledge" means actual knowledge.

AB480-ASA1,12,11 (3) "Discover," "learn," or words of similar import refer to knowledge rather than to notice.

AB480-ASA1,12,14 (4) A person "notifies" or "gives" a notice or notification to another by taking such steps as may be reasonably required to inform the other in ordinary course, whether or not the other person actually comes to know of it.

AB480-ASA1,12,16 (5) Subject to sub. (6), a person "receives" a notice or notification when any of the following apply:

AB480-ASA1,12,17 (a) It comes to that person's attention.

AB480-ASA1,12,20 (b) It is duly delivered in a form reasonable under the circumstances at the place of business through which the contract was made or at another location held out by that person as the place for receipt of such communications.

AB480-ASA1,13,6 (6) Notice, knowledge, or a notice or notification received by an organization is effective for a particular transaction from the time it is brought to the attention of the individual conducting that transaction and, in any event, from the time it would have been brought to the individual's attention if the organization had exercised due diligence. An organization exercises due diligence if it maintains reasonable routines for communicating significant information to the person conducting the transaction and there is reasonable compliance with the routines. Due diligence does not require an individual acting for the organization to communicate information unless the communication is part of the individual's regular duties or the individual has reason to know of the transaction and that the transaction would be materially affected by the information.

AB480-ASA1,13,9 401.203 Lease distinguished from security interest. (1) Whether a transaction in the form of a lease creates a lease or security interest is determined by the facts of each case.

AB480-ASA1,13,13 (2) A transaction in the form of a lease creates a security interest if the consideration that the lessee is to pay the lessor for the right to possession and use of the goods is an obligation for the term of the lease and is not subject to termination by the lessee, and if any of the following apply:

AB480-ASA1,13,15 (a) The original term of the lease is equal to or greater than the remaining economic life of the goods.

AB480-ASA1,13,17 (b) The lessee is bound to renew the lease for the remaining economic life of the goods or is bound to become the owner of the goods.

AB480-ASA1,13,20 (c) The lessee has an option to renew the lease for the remaining economic life of the goods for no additional consideration or for nominal additional consideration upon compliance with the lease agreement.

AB480-ASA1,13,23 (d) The lessee has an option to become the owner of the goods for no additional consideration or for nominal additional consideration upon compliance with the lease agreement.

AB480-ASA1,13,25 (3) A transaction in the form of a lease does not create a security interest merely because of any of the following:

AB480-ASA1,14,3 (a) The present value of the consideration the lessee is obligated to pay the lessor for the right to possession and use of the goods is substantially equal to or is greater than the fair market value of the goods at the time the lease is entered into.

AB480-ASA1,14,4 (b) The lessee assumes risk of loss of the goods.

AB480-ASA1,14,6 (c) The lessee agrees to pay taxes, insurance, filing, recording, or registration fees, or service or maintenance costs with respect to the goods.

AB480-ASA1,14,8 (d) The lessee has an option to renew the lease or to become the owner of the goods.

AB480-ASA1,14,11 (e) The lessee has an option to renew the lease for a fixed rent that is equal to or greater than the reasonably predictable fair market rent for the use of the goods for the term of the renewal at the time the option is to be performed.

AB480-ASA1,14,14 (f) The lessee has an option to become the owner of the goods for a fixed price that is equal to or greater than the reasonably predictable fair market value of the goods at the time the option is to be performed.

AB480-ASA1,14,17 (4) Additional consideration is nominal if it is less than the lessee's reasonably predictable cost of performing under the lease agreement if the option is not exercised. Additional consideration is not nominal if any of the following apply:

AB480-ASA1,14,20 (a) When the option to renew the lease is granted to the lessee, the rent is stated to be the fair market rent for the use of the goods for the term of the renewal determined at the time the option is to be performed.

AB480-ASA1,14,23 (b) When the option to become the owner of the goods is granted to the lessee, the price is stated to be the fair market value of the goods determined at the time the option is to be performed.

AB480-ASA1,15,2 (5) The "remaining economic life of the goods" and "reasonably predictable" fair market rent, fair market value, or cost of performing under the lease agreement must be determined with reference to the facts and circumstances at the time the transaction is entered into.

AB480-ASA1,15,5 401.204 Value. Except as otherwise provided in chs. 403, 404, 405, and 406, a person gives value for rights if the person acquires them under any of the following circumstances:

AB480-ASA1,15,8 (1) In return for a binding commitment to extend credit or for the extension of immediately available credit, whether or not drawn upon and whether or not a charge-back is provided for in the event of difficulties in collection.

AB480-ASA1,15,9 (2) As security for, or in total or partial satisfaction of, a preexisting claim.

AB480-ASA1,15,10 (3) By accepting delivery under a preexisting contract for purchase.

AB480-ASA1,15,11 (4) In return for any consideration sufficient to support a simple contract.

AB480-ASA1,15,14 401.205 Reasonable time; seasonableness. (1) Whether a time for taking an action required by chs. 401 to 411 is reasonable depends on the nature, purpose, and circumstances of the action.

AB480-ASA1,15,16 (2) An action is taken seasonably if it is taken at or within the time agreed or, if no time is agreed, at or within a reasonable time.

AB480-ASA1,15,17 Subchapter iii

AB480-ASA1,15,19 TERRITORIAL APPLICABILITY AND GENERAL RULES

AB480-ASA1,15,21 401.301 Territorial applicability; parties' power to choose applicable law.

AB480-ASA1,15,25 (1) Except as otherwise provided in this section, when a transaction bears a reasonable relation to this state and to another state or nation the parties may agree that the law either of this state or of such other state or nation shall govern their rights and duties.

AB480-ASA1,16,3 (2) In the absence of an agreement under sub. (1), and except as provided in sub. (3), chs. 401 to 411 apply to transactions bearing an appropriate relation to this state.

AB480-ASA1,16,6 (3) If one of the following provisions of chs. 401 to 411 specifies the applicable law, that provision governs and a contrary agreement is effective only to the extent permitted by the law so specified:

AB480-ASA1,16,7 (a) Section 402.402.

AB480-ASA1,16,8 (b) Sections 411.105 and 411.106.

AB480-ASA1,16,9 (c) Section 404.102.

AB480-ASA1,16,10 (d) Section 410.507.

AB480-ASA1,16,11 (e) Section 405.116.

AB480-ASA1,16,12 (f) Section 406.103.

AB480-ASA1,16,13 (g) Section 408.110.

AB480-ASA1,16,14 (h) Sections 409.301 through 409.307.

AB480-ASA1,16,17 401.302 Variation by agreement. (1) Except as otherwise provided in sub. (2) or elsewhere in chs. 401 to 411, the effect of provisions of chs. 401 to 411 may be varied by agreement.

AB480-ASA1,16,23 (2) The obligations of good faith, diligence, reasonableness, and care prescribed by chs. 401 to 411 may not be disclaimed by agreement. The parties, by agreement, may determine the standards by which the performance of those obligations is to be measured if those standards are not manifestly unreasonable. Whenever chs. 401 to 411 require any action to be taken within a reasonable time, any time which is not manifestly unreasonable may be fixed by agreement.

AB480-ASA1,17,3 (3) The presence in certain provisions of chs. 401 to 411 of the phrase "unless otherwise agreed," or words of similar import, does not imply that the effect of other provisions may not be varied by agreement under this section.

AB480-ASA1,17,6 401.303 Course of performance, course of dealing, and usage of trade. (1) A "course of performance" is a sequence of conduct between the parties to a particular transaction that exists if any of the following apply:

AB480-ASA1,17,8 (a) The agreement of the parties with respect to the transaction involves repeated occasions for performance by a party.

AB480-ASA1,17,11 (b) The other party, with knowledge of the nature of the performance and opportunity for objection to it, accepts the performance or acquiesces in it without objection.

AB480-ASA1,17,15 (2) A "course of dealing" is a sequence of conduct concerning previous transactions between the parties to a particular transaction that is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct.

AB480-ASA1,17,21 (3) A "usage of trade" is any practice or method of dealing having such regularity of observance in a place, vocation, or trade as to justify an expectation that it will be observed with respect to the transaction in question. The existence and scope of such a usage are to be proved as facts. If it is established that such a usage is embodied in a trade code or similar record, the interpretation of the record is a question of law.

AB480-ASA1,18,3 (4) A course of performance or course of dealing between the parties or usage of trade in the vocation or trade in which they are engaged or of which they are or should be aware is relevant in ascertaining the meaning of the parties' agreement, may give particular meaning to specific terms of the agreement, and may supplement or qualify the terms of the agreement. A usage of trade applicable in the place in which part of the performance under the agreement is to occur may be so utilized as to that part of the performance.

AB480-ASA1,18,7 (5) Except as otherwise provided in sub. (6), the express terms of an agreement and any applicable course of performance, course of dealing, or usage of trade must be construed whenever reasonable as consistent with each other. If such a construction is unreasonable, all of the following apply:

AB480-ASA1,18,9 (a) Express terms prevail over course of performance, course of dealing, and usage of trade.

AB480-ASA1,18,10 (b) Course of performance prevails over course of dealing and usage of trade.

AB480-ASA1,18,11 (c) Course of dealing prevails over usage of trade.

AB480-ASA1,18,13 (6) Subject to s. 402.209, a course of performance is relevant to show a waiver or modification of any term inconsistent with the course of performance.

AB480-ASA1,18,16 (7) Evidence of a relevant usage of trade offered by one party is not admissible unless that party has given the other party notice that the court finds sufficient to prevent unfair surprise to the other party.

AB480-ASA1,18,18 401.304 Obligation of good faith. Every contract or duty within chs. 401 to 411 imposes an obligation of good faith in its performance and enforcement.

AB480-ASA1,18,23 401.305 Remedies to be liberally administered. (1) The remedies provided by chs. 401 to 411 must be liberally administered to the end that the aggrieved party may be put in as good a position as if the other party had fully performed but neither consequential or special damages nor penal damages may be had except as specifically provided in chs. 401 to 411 or by other rule of law.

AB480-ASA1,18,25 (2) Any right or obligation declared by chs. 401 to 411 is enforceable by action unless the provision declaring it specifies a different and limited effect.

AB480-ASA1,19,3 401.306 Waiver or renunciation of claim or right after breach. A claim or right arising out of an alleged breach may be discharged in whole or in part without consideration by agreement of the aggrieved party in an authenticated record.

AB480-ASA1,19,9 401.307 Prima facie evidence by 3rd-party documents. A document in due form purporting to be a bill of lading, policy or certificate of insurance, official weigher's or inspector's certificate, consular invoice, or any other document authorized or required by the contract to be issued by a 3rd party shall be prima facie evidence of its own authenticity and genuineness and of the facts stated in the document by the 3rd party.

AB480-ASA1,19,14 401.308 Performance or acceptance under reservation of rights. (1) A party that with explicit reservation of rights performs or promises performance or assents to performance in a manner demanded or offered by the other party does not thereby prejudice the rights reserved. Such words as "without prejudice," "under protest," or the like are sufficient.

AB480-ASA1,19,15 (2) Subsection (1) does not apply to an accord and satisfaction.

AB480-ASA1,19,22 401.309 Option to accelerate at will. A term providing that one party or that party's successor in interest may accelerate payment or performance or require collateral or additional collateral "at will" or when the party "deems itself insecure," or words of similar import, means that the party has power to do so only if that party in good faith believes that the prospect of payment or performance is impaired. The burden of establishing lack of good faith is on the party against which the power has been exercised.

AB480-ASA1,20,3 401.310 Subordinated obligations. An obligation may be issued as subordinated to performance of another obligation of the person obligated, or a creditor may subordinate its right to performance of an obligation by agreement with either the person obligated or another creditor of the person obligated. Subordination does not create a security interest as against either the common debtor or a subordinated creditor.

AB480-ASA1, s. 9 Section 9. 402.202 (1) of the statutes is amended to read:

AB480-ASA1,20,6 402.202 (1) By course of dealing or usage of trade (s. 401.205 401.303) or by course of performance (s. 402.208);

AB480-ASA1, s. 10 Section 10. 402.208 (2) of the statutes is amended to read:

AB480-ASA1,20,13 402.208 (2) The express terms of the agreement and any such course of performance, as well as any course of dealing and usage of trade, shall be construed whenever reasonable as consistent with each other; but when such construction is unreasonable, express terms shall control course of performance and course of performance shall control both course of dealing and usage of trade (s. 401.205 401.303).

AB480-ASA1, s. 11 Section 11. 403.103 (1) (j) of the statutes is amended to read:

AB480-ASA1,20,16 403.103 (1) (j) "Prove" with respect to a fact means to meet the burden of establishing a fact, as defined in s. 401.201 (8) (2) (e).

AB480-ASA1, s. 12 Section 12. 407.102 (1) (e) of the statutes is amended to read:

AB480-ASA1,20,19 407.102 (1) (e) "Document" means document of title as defined in s. 401.201 (2) (i).

AB480-ASA1, s. 13 Section 13. 407.103 (2) of the statutes is amended to read:

AB480-ASA1,21,2 407.103 (2) This chapter does not repeal or modify any laws prescribing the form or contents of documents of title or the services or facilities to be afforded by bailees, or otherwise regulating bailees' businesses in respects not specifically dealt with herein; but the fact that such laws are violated does not affect the status of a document of title which otherwise complies with the definition of a document of title in s. 401.201 (2) (i).

AB480-ASA1, s. 14 Section 14. 410.106 (1) of the statutes is amended to read:

AB480-ASA1,21,16 410.106 (1) The time of receipt of a payment order or communication canceling or amending a payment order is determined by the rules applicable to receipt of a notice stated in s. 401.201 (26) (b) 401.202 (6). A receiving bank may fix a cutoff time or times on a funds-transfer business day for the receipt and processing of payment orders and communications canceling or amending payment orders. Different cutoff times may apply to payment orders, cancellations, or amendments, or to different categories of payment orders, cancellations, or amendments. A cutoff time may apply to senders generally or different cutoff times may apply to different senders or categories of payment orders. If a payment order or communication canceling or amending a payment order is received after the close of a funds-transfer business day or after the appropriate cutoff time on a funds-transfer business day, the receiving bank may treat the payment order or communication as received at the opening of the next funds-transfer business day.

AB480-ASA1, s. 15 Section 15. 410.204 (2) of the statutes is amended to read:

AB480-ASA1,21,20 410.204 (2) Reasonable time under sub. (1) may be fixed by agreement as stated in s. 401.204 401.302 (1), but the obligation of a receiving bank to refund payment as stated in sub. (1) may not otherwise be varied by agreement.