AB480-ASA1,10,77 (qm) "Purchaser" means a person that takes by purchase.
AB480-ASA1,10,98 (r) "Record" means information that is inscribed on a tangible medium or that
9is stored in an electronic or other medium and is retrievable in perceivable form.
AB480-ASA1,10,1110 (rm) "Remedy" means any remedial right to which an aggrieved party is
11entitled with or without resort to a tribunal.
AB480-ASA1,10,1412 (s) "Representative" means any person empowered to act for another, including
13an agent, an officer of a corporation or association, and a trustee, executor, or
14administrator of an estate.
AB480-ASA1,10,1515 (sm) "Right" includes remedy.
AB480-ASA1,11,316 (t) "Security interest" means an interest in personal property or fixtures which
17secures payment or performance of an obligation. The term also includes any
18interest of a consignor and a buyer of accounts, chattel paper, a payment intangible,
19or a promissory note in a transaction that is subject to ch. 409. The special property
20interest of a buyer of goods on identification of those goods to a contract for sale under
21s. 402.401 is not a "security interest," but a buyer may also acquire a "security
22interest" by complying with ch. 409. Except as otherwise provided in s. 402.505, the
23right of a seller or lessor of goods under ch. 402 or 411 to retain or acquire possession
24of the goods is not a "security interest," but a seller or lessor may also acquire a
25"security interest" by complying with ch. 409. The retention or reservation of title

1by a seller of goods notwithstanding shipment or delivery to the buyer (s. 402.401)
2is limited in effect to a reservation of a "security interest." Whether a transaction in
3the form of a lease creates a "security interest" is determined pursuant to s. 401.203.
AB480-ASA1,11,54 (tm) "Send" in connection with a writing, record, or notice means any of the
5following:
AB480-ASA1,11,106 1. To deposit in the mail or deliver for transmission by any other usual means
7of communication with postage or cost of transmission provided for and properly
8addressed and, in the case of an instrument, to an address specified thereon or
9otherwise agreed, or if there be none to any address reasonable under the
10circumstances.
AB480-ASA1,11,1211 2. In any other way to cause to be received any record or notice within the time
12it would have arrived if properly sent.
AB480-ASA1,11,1413 (u) "Signed" includes any symbol executed or adopted with present intention
14to adopt or accept a writing.
AB480-ASA1,11,1715 (um) "State" means a state of the United States, the District of Columbia,
16Puerto Rico, the United States Virgin Islands, or any territory or insular possession
17subject to the jurisdiction of the United States.
AB480-ASA1,11,1818 (v) "Surety" includes a guarantor or other secondary obligor.
AB480-ASA1,11,2019 (vm) "Term" means a portion of an agreement that relates to a particular
20matter.
AB480-ASA1,11,2221 (w) "Unauthorized signature" means a signature made without actual,
22implied, or apparent authority. The term includes a forgery.
AB480-ASA1,11,2423 (wm) "Warehouse receipt" means a receipt issued by a person engaged in the
24business of storing goods for hire.
AB480-ASA1,12,2
1(x) "Writing" includes printing, typewriting, or any other intentional reduction
2to tangible form. "Written" has a corresponding meaning.
AB480-ASA1,12,4 3401.202 Notice; knowledge. (1) Subject to sub. (6), a person has "notice" of
4a fact if the person satisfies any of the following:
AB480-ASA1,12,55 (a) Has actual knowledge of it.
AB480-ASA1,12,66 (b) Has received a notice or notification of it.
AB480-ASA1,12,87 (c) From all the facts and circumstances known to the person at the time in
8question, has reason to know that it exists.
AB480-ASA1,12,9 9(2) "Knowledge" means actual knowledge.
AB480-ASA1,12,11 10(3) "Discover," "learn," or words of similar import refer to knowledge rather
11than to notice.
AB480-ASA1,12,14 12(4) A person "notifies" or "gives" a notice or notification to another by taking
13such steps as may be reasonably required to inform the other in ordinary course,
14whether or not the other person actually comes to know of it.
AB480-ASA1,12,16 15(5) Subject to sub. (6), a person "receives" a notice or notification when any of
16the following apply:
AB480-ASA1,12,1717 (a) It comes to that person's attention.
AB480-ASA1,12,2018 (b) It is duly delivered in a form reasonable under the circumstances at the
19place of business through which the contract was made or at another location held
20out by that person as the place for receipt of such communications.
AB480-ASA1,13,6 21(6) Notice, knowledge, or a notice or notification received by an organization
22is effective for a particular transaction from the time it is brought to the attention
23of the individual conducting that transaction and, in any event, from the time it
24would have been brought to the individual's attention if the organization had
25exercised due diligence. An organization exercises due diligence if it maintains

1reasonable routines for communicating significant information to the person
2conducting the transaction and there is reasonable compliance with the routines.
3Due diligence does not require an individual acting for the organization to
4communicate information unless the communication is part of the individual's
5regular duties or the individual has reason to know of the transaction and that the
6transaction would be materially affected by the information.
AB480-ASA1,13,9 7401.203 Lease distinguished from security interest. (1) Whether a
8transaction in the form of a lease creates a lease or security interest is determined
9by the facts of each case.
AB480-ASA1,13,13 10(2) A transaction in the form of a lease creates a security interest if the
11consideration that the lessee is to pay the lessor for the right to possession and use
12of the goods is an obligation for the term of the lease and is not subject to termination
13by the lessee, and if any of the following apply:
AB480-ASA1,13,1514 (a) The original term of the lease is equal to or greater than the remaining
15economic life of the goods.
AB480-ASA1,13,1716 (b) The lessee is bound to renew the lease for the remaining economic life of the
17goods or is bound to become the owner of the goods.
AB480-ASA1,13,2018 (c) The lessee has an option to renew the lease for the remaining economic life
19of the goods for no additional consideration or for nominal additional consideration
20upon compliance with the lease agreement.
AB480-ASA1,13,2321 (d) The lessee has an option to become the owner of the goods for no additional
22consideration or for nominal additional consideration upon compliance with the
23lease agreement.
AB480-ASA1,13,25 24(3) A transaction in the form of a lease does not create a security interest merely
25because of any of the following:
AB480-ASA1,14,3
1(a) The present value of the consideration the lessee is obligated to pay the
2lessor for the right to possession and use of the goods is substantially equal to or is
3greater than the fair market value of the goods at the time the lease is entered into.
AB480-ASA1,14,44 (b) The lessee assumes risk of loss of the goods.
AB480-ASA1,14,65 (c) The lessee agrees to pay taxes, insurance, filing, recording, or registration
6fees, or service or maintenance costs with respect to the goods.
AB480-ASA1,14,87 (d) The lessee has an option to renew the lease or to become the owner of the
8goods.
AB480-ASA1,14,119 (e) The lessee has an option to renew the lease for a fixed rent that is equal to
10or greater than the reasonably predictable fair market rent for the use of the goods
11for the term of the renewal at the time the option is to be performed.
AB480-ASA1,14,1412 (f) The lessee has an option to become the owner of the goods for a fixed price
13that is equal to or greater than the reasonably predictable fair market value of the
14goods at the time the option is to be performed.
AB480-ASA1,14,17 15(4) Additional consideration is nominal if it is less than the lessee's reasonably
16predictable cost of performing under the lease agreement if the option is not
17exercised. Additional consideration is not nominal if any of the following apply:
AB480-ASA1,14,2018 (a) When the option to renew the lease is granted to the lessee, the rent is stated
19to be the fair market rent for the use of the goods for the term of the renewal
20determined at the time the option is to be performed.
AB480-ASA1,14,2321 (b) When the option to become the owner of the goods is granted to the lessee,
22the price is stated to be the fair market value of the goods determined at the time the
23option is to be performed.
AB480-ASA1,15,2 24(5) The "remaining economic life of the goods" and "reasonably predictable" fair
25market rent, fair market value, or cost of performing under the lease agreement must

1be determined with reference to the facts and circumstances at the time the
2transaction is entered into.
AB480-ASA1,15,5 3401.204 Value. Except as otherwise provided in chs. 403, 404, 405, and 406,
4a person gives value for rights if the person acquires them under any of the following
5circumstances:
AB480-ASA1,15,8 6(1) In return for a binding commitment to extend credit or for the extension of
7immediately available credit, whether or not drawn upon and whether or not a
8charge-back is provided for in the event of difficulties in collection.
AB480-ASA1,15,9 9(2) As security for, or in total or partial satisfaction of, a preexisting claim.
AB480-ASA1,15,10 10(3) By accepting delivery under a preexisting contract for purchase.
AB480-ASA1,15,11 11(4) In return for any consideration sufficient to support a simple contract.
AB480-ASA1,15,14 12401.205 Reasonable time; seasonableness. (1) Whether a time for taking
13an action required by chs. 401 to 411 is reasonable depends on the nature, purpose,
14and circumstances of the action.
AB480-ASA1,15,16 15(2) An action is taken seasonably if it is taken at or within the time agreed or,
16if no time is agreed, at or within a reasonable time.
AB480-ASA1,15,1717 Subchapter iii
AB480-ASA1,15,1918 TERRITORIAL APPLICABILITY AND
19 GENERAL RULES
AB480-ASA1,15,21 20401.301 Territorial applicability; parties' power to choose applicable
21law.
AB480-ASA1,15,25 22(1) Except as otherwise provided in this section, when a transaction bears a
23reasonable relation to this state and to another state or nation the parties may agree
24that the law either of this state or of such other state or nation shall govern their
25rights and duties.
AB480-ASA1,16,3
1(2) In the absence of an agreement under sub. (1), and except as provided in
2sub. (3), chs. 401 to 411 apply to transactions bearing an appropriate relation to this
3state.
AB480-ASA1,16,6 4(3) If one of the following provisions of chs. 401 to 411 specifies the applicable
5law, that provision governs and a contrary agreement is effective only to the extent
6permitted by the law so specified:
AB480-ASA1,16,77 (a) Section 402.402.
AB480-ASA1,16,88 (b) Sections 411.105 and 411.106.
AB480-ASA1,16,99 (c) Section 404.102.
AB480-ASA1,16,1010 (d) Section 410.507.
AB480-ASA1,16,1111 (e) Section 405.116.
AB480-ASA1,16,1212 (f) Section 406.103.
AB480-ASA1,16,1313 (g) Section 408.110.
AB480-ASA1,16,1414 (h) Sections 409.301 through 409.307.
AB480-ASA1,16,17 15401.302 Variation by agreement. (1) Except as otherwise provided in sub.
16(2) or elsewhere in chs. 401 to 411, the effect of provisions of chs. 401 to 411 may be
17varied by agreement.
AB480-ASA1,16,23 18(2) The obligations of good faith, diligence, reasonableness, and care prescribed
19by chs. 401 to 411 may not be disclaimed by agreement. The parties, by agreement,
20may determine the standards by which the performance of those obligations is to be
21measured if those standards are not manifestly unreasonable. Whenever chs. 401
22to 411 require any action to be taken within a reasonable time, any time which is not
23manifestly unreasonable may be fixed by agreement.
AB480-ASA1,17,3
1(3) The presence in certain provisions of chs. 401 to 411 of the phrase "unless
2otherwise agreed," or words of similar import, does not imply that the effect of other
3provisions may not be varied by agreement under this section.
AB480-ASA1,17,6 4401.303 Course of performance, course of dealing, and usage of trade.
5(1)
A "course of performance" is a sequence of conduct between the parties to a
6particular transaction that exists if any of the following apply:
AB480-ASA1,17,87 (a) The agreement of the parties with respect to the transaction involves
8repeated occasions for performance by a party.
AB480-ASA1,17,119 (b) The other party, with knowledge of the nature of the performance and
10opportunity for objection to it, accepts the performance or acquiesces in it without
11objection.
AB480-ASA1,17,15 12(2) A "course of dealing" is a sequence of conduct concerning previous
13transactions between the parties to a particular transaction that is fairly to be
14regarded as establishing a common basis of understanding for interpreting their
15expressions and other conduct.
AB480-ASA1,17,21 16(3) A "usage of trade" is any practice or method of dealing having such
17regularity of observance in a place, vocation, or trade as to justify an expectation that
18it will be observed with respect to the transaction in question. The existence and
19scope of such a usage are to be proved as facts. If it is established that such a usage
20is embodied in a trade code or similar record, the interpretation of the record is a
21question of law.
AB480-ASA1,18,3 22(4) A course of performance or course of dealing between the parties or usage
23of trade in the vocation or trade in which they are engaged or of which they are or
24should be aware is relevant in ascertaining the meaning of the parties' agreement,
25may give particular meaning to specific terms of the agreement, and may

1supplement or qualify the terms of the agreement. A usage of trade applicable in the
2place in which part of the performance under the agreement is to occur may be so
3utilized as to that part of the performance.
AB480-ASA1,18,7 4(5) Except as otherwise provided in sub. (6), the express terms of an agreement
5and any applicable course of performance, course of dealing, or usage of trade must
6be construed whenever reasonable as consistent with each other. If such a
7construction is unreasonable, all of the following apply:
AB480-ASA1,18,98 (a) Express terms prevail over course of performance, course of dealing, and
9usage of trade.
AB480-ASA1,18,1010 (b) Course of performance prevails over course of dealing and usage of trade.
AB480-ASA1,18,1111 (c) Course of dealing prevails over usage of trade.
AB480-ASA1,18,13 12(6) Subject to s. 402.209, a course of performance is relevant to show a waiver
13or modification of any term inconsistent with the course of performance.
AB480-ASA1,18,16 14(7) Evidence of a relevant usage of trade offered by one party is not admissible
15unless that party has given the other party notice that the court finds sufficient to
16prevent unfair surprise to the other party.
AB480-ASA1,18,18 17401.304 Obligation of good faith. Every contract or duty within chs. 401 to
18411 imposes an obligation of good faith in its performance and enforcement.
AB480-ASA1,18,23 19401.305 Remedies to be liberally administered. (1) The remedies
20provided by chs. 401 to 411 must be liberally administered to the end that the
21aggrieved party may be put in as good a position as if the other party had fully
22performed but neither consequential or special damages nor penal damages may be
23had except as specifically provided in chs. 401 to 411 or by other rule of law.
AB480-ASA1,18,25 24(2) Any right or obligation declared by chs. 401 to 411 is enforceable by action
25unless the provision declaring it specifies a different and limited effect.
AB480-ASA1,19,3
1401.306 Waiver or renunciation of claim or right after breach. A claim
2or right arising out of an alleged breach may be discharged in whole or in part without
3consideration by agreement of the aggrieved party in an authenticated record.
AB480-ASA1,19,9 4401.307 Prima facie evidence by 3rd-party documents. A document in
5due form purporting to be a bill of lading, policy or certificate of insurance, official
6weigher's or inspector's certificate, consular invoice, or any other document
7authorized or required by the contract to be issued by a 3rd party shall be prima facie
8evidence of its own authenticity and genuineness and of the facts stated in the
9document by the 3rd party.
AB480-ASA1,19,14 10401.308 Performance or acceptance under reservation of rights. (1)
11A party that with explicit reservation of rights performs or promises performance or
12assents to performance in a manner demanded or offered by the other party does not
13thereby prejudice the rights reserved. Such words as "without prejudice," "under
14protest," or the like are sufficient.
AB480-ASA1,19,15 15(2) Subsection (1) does not apply to an accord and satisfaction.
AB480-ASA1,19,22 16401.309 Option to accelerate at will. A term providing that one party or
17that party's successor in interest may accelerate payment or performance or require
18collateral or additional collateral "at will" or when the party "deems itself insecure,"
19or words of similar import, means that the party has power to do so only if that party
20in good faith believes that the prospect of payment or performance is impaired. The
21burden of establishing lack of good faith is on the party against which the power has
22been exercised.
AB480-ASA1,20,3 23401.310 Subordinated obligations. An obligation may be issued as
24subordinated to performance of another obligation of the person obligated, or a
25creditor may subordinate its right to performance of an obligation by agreement with

1either the person obligated or another creditor of the person obligated.
2Subordination does not create a security interest as against either the common
3debtor or a subordinated creditor.
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