LRB-0388/1
MDK:cjs:md
2009 - 2010 LEGISLATURE
January 25, 2010 - Introduced by Representatives Cullen, Turner, Townsend, A.
Williams and A. Ott, cosponsored by Senators Risser and Taylor. Referred
to Committee on Jobs, the Economy and Small Business.
AB688,1,11
1An Act to amend 99.01 (2), 137.24 (1), 402.104 (2), 402.310 (3), 402.323 (2)
2(intro.), 402.401 (3) (a), 402.401 (3) (b), 402.503 (4) (b), 402.503 (5) (b), 402.505
3(1) (b), 402.505 (2), 402.506 (2), 402.509 (2) (a), 402.509 (2) (c), 402.605 (2),
4402.705 (2) (c), 402.705 (3) (c), 404.210 (3) (intro.), 409.203 (2) (c) 4., 409.207 (3)
5(intro.), 409.208 (2) (d), 409.208 (2) (e), 409.301 (3) (intro.), 409.310 (2) (e),
6409.310 (2) (h), 409.312 (5), 409.313 (1), 409.314 (1), 409.314 (2), 409.317 (2),
7409.317 (4), 409.338 (2), 409.601 (2), 411.103 (1) (a), 411.103 (1) (o), 411.514 (2),
8411.526 (2) (c) and 799.45 (3) (b);
to repeal and recreate chapter 407; and
to
9create 137.12 (6), 402.103 (3) (dm), 404.104 (3) (fc), 408.103 (7), 409.102 (2) (df)
10and 409.208 (2) (f) of the statutes;
relating to: adopting revised Article 7 of the
11Uniform Commercial Code, concerning documents of title.
Analysis by the Legislative Reference Bureau
Article 7 of the Uniform Commercial Code (UCC) regulates the transfer of goods
in interstate commerce, specifically dealing with the transfer of title to goods that are
moved or shipped from one location to another. Wisconsin had earlier enacted article
7 of the UCC, but in 2003 the National Conference of Commissioners on Uniform
State Laws adopted a revised version of article 7 of the UCC and recommended its
enactment in all of the states. This bill enacts the revised version of article 7 of the
UCC into Wisconsin law.
The transfer of goods in interstate commerce involves not only the shipment
and storage of tangible goods, but also the transfer of the ownership rights to those
goods. Under current law, such rights are transferred by specific documents of title.
These title documents are paper documents, consisting of originals and copies, and
may be either negotiable or nonnegotiable. The use of paper documents to transfer
title and other ownership rights has worked well in the past, but as commercial
transactions in the United States and around the world are increasingly conducted
and facilitated through electronic means the current-law requirements for paper
documents may now impede the transfer of title to goods that are moved or shipped
from one location to another. Revised article 7 of the UCC addresses this issue by
permitting electronic documents of title for the transfer of goods in interstate
commerce.
Under the bill, article 7 of the UCC is revised to provide that a lawful document
of title includes an electronic document of title, which is evidenced by a record
consisting of information stored in an electronic medium. Under the bill, for the
purpose of transferring ownership rights in tangible goods, electronic documents of
title are the legal equivalent of paper documents of title. The remaining portions of
current law relating to article 7 of the UCC are amended to facilitate the use of either
electronic documents of title or the current paper documents of title. Most
importantly, revised article 7 of the UCC, as contained in the bill, creates new
definitions of "record" and "sign." Under the bill, a record is "information that is
inscribed on a tangible medium or that is stored in an electronic or other medium and
is retrievable in perceivable form." The term "sign" is defined to mean "to execute or
adopt a tangible symbol" and "to attach or logically associate with the record an
electronic sound, symbol, or process." Wherever the term "writing" or an equivalent
was previously used in article 7 of the UCC, the term "record" is uniformly used in
revised article 7 of the UCC. When a document is required to be signed under article
7 of the UCC, electronic signing satisfies the requirement under revised article 7 of
the UCC.
Finally, the bill incorporates all technical or nonsubstantive portions of revised
article 7 of the UCC that update or clarify the earlier version of article 7 of the UCC,
as well as eliminates provisions that no longer have legal effect.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB688, s. 1
1Section
1. 99.01 (2) of the statutes is amended to read:
AB688,3,32
99.01
(2) "Property" means goods as defined in s. 407.102 (1)
(f) (g). "Property"
3includes food; agricultural and commercial products, commodities or equipment;
1household furnishings; automobiles, boats, snowmobiles or other vehicles and
2conveyances; and all other items of a personal, family, household, agricultural,
3business or commercial nature which may be the subject of a contract of storage.
AB688, s. 2
4Section
2. 137.12 (6) of the statutes is created to read:
AB688,3,65
137.12
(6) To the extent there is a conflict between this subchapter and ch. 407,
6ch. 407 governs.
AB688, s. 3
7Section
3. 137.24 (1) of the statutes is amended to read:
AB688,3,108
137.24
(1) In this section, "transferable record" means an electronic record that
9would be is a note under ch. 403 or a record under ch. 407
if the electronic record were
10in writing.
AB688, s. 4
11Section
4. 402.103 (3) (dm) of the statutes is created to read:
AB688,3,1212
402.103
(3) (dm) "Control" — s. 407.106.
AB688, s. 5
13Section
5. 402.104 (2) of the statutes is amended to read:
AB688,3,2214
402.104
(2) "Financing agency" means a bank, finance company or other person
15who in the ordinary course of business makes advances against goods or documents
16of title or who by arrangement with either the seller or the buyer intervenes in
17ordinary course to make or collect payment due or claimed under the contract for
18sale, as by purchasing or paying the seller's draft or making advances against it or
19by merely taking it for collection whether or not documents of title accompany
or are
20associated with the draft. "Financing agency" includes also a bank or other person
21who similarly intervenes between persons who are in the position of seller and buyer
22in respect to the goods (s. 402.707).
AB688, s. 6
23Section
6. 402.310 (3) of the statutes is amended to read:
AB688,4,424
402.310
(3) If delivery is authorized and made by way of documents of title
25otherwise than by sub. (2) then payment is due
regardless of where the goods are to
1be received at the time and place at which the buyer is to receive the documents
2regardless of where the goods are to be received; or at the time the buyer is to receive
3delivery of the electronic documents and at the seller's place of business or, if none,
4the seller's residence; and
AB688, s. 7
5Section
7. 402.323 (2) (intro.) of the statutes is amended to read:
AB688,4,106
402.323
(2) (intro.) Where in a case within sub. (1) a
tangible bill of lading has
7been issued in a set of parts, unless otherwise agreed if the documents are not to be
8sent from abroad the buyer may demand tender of the full set; otherwise only one
9part of the bill of lading need be tendered. Even if the agreement expressly requires
10a full set:
AB688, s. 8
11Section
8. 402.401 (3) (a) of the statutes is amended to read:
AB688,4,1512
402.401
(3) (a) If the seller is to deliver a
tangible document of title, title passes
13at the time when and the place where the seller delivers such documents
and, if the
14seller is to deliver an electronic document of title, title passes when the seller delivers
15the document; or
AB688, s. 9
16Section
9. 402.401 (3) (b) of the statutes is amended to read:
AB688,4,1917
402.401
(3) (b) If the goods are at the time of contracting already identified and
18no documents
of title are to be delivered, title passes at the time and place of
19contracting.
AB688, s. 10
20Section
10. 402.503 (4) (b) of the statutes is amended to read:
AB688,5,421
402.503
(4) (b) Tender to the buyer of a nonnegotiable document of title or of
22a
written direction to record directing the bailee to deliver is sufficient tender unless
23the buyer seasonably objects, and
except as otherwise provided in ch. 409 receipt by
24the bailee of notification of the buyer's rights fixes those rights as against the bailee
25and all 3rd persons; but risk of loss of the goods and of any failure by the bailee to
1honor the nonnegotiable document of title or to obey the direction remains on the
2seller until the buyer has had a reasonable time to present the document or direction,
3and a refusal by the bailee to honor the document or to obey the direction defeats the
4tender.
AB688, s. 11
5Section
11. 402.503 (5) (b) of the statutes is amended to read:
AB688,5,86
402.503
(5) (b) Tender through customary banking channels is sufficient and
7dishonor of a draft accompanying
or associated with the documents constitutes
8nonacceptance or rejection.
AB688, s. 12
9Section
12. 402.505 (1) (b) of the statutes is amended to read:
AB688,5,1410
402.505
(1) (b) A nonnegotiable bill of lading to the seller or the seller's nominee
11reserves possession of the goods as security but except in a case of conditional
12delivery (s. 402.507 (2)) a nonnegotiable bill of lading naming the buyer as consignee
13reserves no security interest even though the seller retains possession
or control of
14the bill of lading.
AB688, s. 13
15Section
13. 402.505 (2) of the statutes is amended to read:
AB688,5,2016
402.505
(2) When shipment by the seller with reservation of a security interest
17is in violation of the contract for sale it constitutes an improper contract for
18transportation within s. 402.504 but impairs neither the rights given to the buyer by
19shipment and identification of the goods to the contract nor the seller's powers as a
20holder of a negotiable document
of title.
AB688, s. 14
21Section
14. 402.506 (2) of the statutes is amended to read:
AB688,5,2522
402.506
(2) The right to reimbursement of a financing agency which has in good
23faith honored or purchased the draft under commitment to or authority from the
24buyer is not impaired by subsequent discovery of defects with reference to any
25relevant document which was apparently regular
on its face.
AB688, s. 15
1Section
15. 402.509 (2) (a) of the statutes is amended to read:
AB688,6,32
402.509
(2) (a) On the buyer's receipt of
possession or control of a negotiable
3document of title covering the goods; or
AB688, s. 16
4Section
16. 402.509 (2) (c) of the statutes is amended to read:
AB688,6,75
402.509
(2) (c) After the buyer's receipt of
possession or control of a
6nonnegotiable document of title or other
written direction to deliver
in a record, as
7provided in s. 402.503 (4) (b).
AB688, s. 17
8Section
17. 402.605 (2) of the statutes is amended to read:
AB688,6,119
402.605
(2) Payment against documents made without reservation of rights
10precludes recovery of the payment for defects apparent
on the face of in the
11documents.
AB688, s. 18
12Section
18. 402.705 (2) (c) of the statutes is amended to read:
AB688,6,1413
402.705
(2) (c) Such acknowledgment to the buyer by a carrier by reshipment
14or as
a warehouse
keeper; or
AB688, s. 19
15Section
19. 402.705 (3) (c) of the statutes is amended to read:
AB688,6,1816
402.705
(3) (c) If a negotiable document of title has been issued for goods the
17bailee is not obliged to obey a notification to stop until surrender
of possession or
18control of the document.
AB688, s. 20
19Section
20. 404.104 (3) (fc) of the statutes is created to read:
AB688,6,2020
404.104
(3) (fc) "Control" — s. 407.106.
AB688, s. 21
21Section
21. 404.210 (3) (intro.) of the statutes is amended to read:
AB688,7,222
404.210
(3) (intro.) Receipt by a collecting bank of a final settlement for an item
23is a realization on its security interest in the item, accompanying documents and
24proceeds. So long as the bank does not receive final settlement for the item or give
25up possession of the item or
possession or control of the accompanying documents for
1purposes other than collection, the security interest continues to that extent and is
2subject to ch. 409, but all of the following apply:
AB688, s. 22
3Section
22. Chapter 407 of the statutes is repealed and recreated to read:
AB688,7,55
Uniform commercial code
AB688,7,6
6— documents of title
AB688,7,10
9407.101 Short title. This chapter may be cited as uniform commercial code
10— documents of title.
AB688,7,12
11407.102 Definitions and index of definitions. (1) In this chapter, unless
12the context otherwise requires:
AB688,7,1413
(a) "Bailee" means a person that by a warehouse receipt, bill of lading, or other
14document of title acknowledges possession of goods and contracts to deliver them.
AB688,7,1515
(b) "Carrier" means a person that issues a bill of lading.
AB688,7,1716
(c) "Consignee" means a person named in a bill of lading to which or to whose
17order the bill promises delivery.
AB688,7,1918
(d) "Consignor" means a person named in a bill of lading as the person from
19which the goods have been received for shipment.
AB688,7,2220
(e) "Delivery order" means a record that contains an order to deliver goods
21directed to a warehouse, carrier, or other person that in the ordinary course of
22business issues warehouse receipts or bills of lading.