LRBs0243/2
MDK&RAC:wlj:pg
2007 - 2008 LEGISLATURE
ASSEMBLY SUBSTITUTE AMENDMENT 1,
TO 2007 ASSEMBLY BILL 481
February 8, 2008 - Offered by Representative Cullen.
AB481-ASA1,1,11
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)
8and 411.526 (2) (c);
to repeal and recreate chapter 407; and
to create 137.12
9(6), 402.103 (3) (dm), 404.104 (3) (fc), 408.103 (7), 409.102 (2) (df) and 409.208
10(2) (f) of the statutes;
relating to: adopting revised Article 7 of the Uniform
11Commercial 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 substitute amendment 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 substitute amendment, 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
substitute amendment, for the purpose of transferring ownership rights in tangible
goods, electronic documents of title are the legal equivalent to 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 substitute amendment, creates new definitions of "record" and
"sign." Under the substitute amendment, 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 "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 the
revised article 7 of the UCC. When a document is required to be signed under article
7 of the UCC, electronic signing meets the test under the revised article 7 of the UCC.
Finally, the substitute amendment 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:
AB481-ASA1,3,5
199.01
(2) "Property" means goods as defined in s. 407.102 (1)
(f) (g). "Property"
2includes food; agricultural and commercial products, commodities or equipment;
3household furnishings; automobiles, boats, snowmobiles or other vehicles and
4conveyances; and all other items of a personal, family, household, agricultural,
5business or commercial nature which may be the subject of a contract of storage.
AB481-ASA1,3,87
137.12
(6) To the extent there is a conflict between this subchapter and ch. 407,
8ch. 407 governs.
AB481-ASA1,3,1210
137.24
(1) In this section, "transferable record" means an electronic record that
11would be a note under ch. 403 or a record under ch. 407
if the electronic record were
12in writing.
AB481-ASA1, s. 4
13Section
4. 402.103 (3) (dm) of the statutes is created to read:
AB481-ASA1,3,1414
402.103
(3) (dm) "Control" — s. 407.106.
AB481-ASA1,3,2416
402.104
(2) "Financing agency" means a bank, finance company or other person
17who in the ordinary course of business makes advances against goods or documents
18of title or who by arrangement with either the seller or the buyer intervenes in
19ordinary course to make or collect payment due or claimed under the contract for
20sale, as by purchasing or paying the seller's draft or making advances against it or
21by merely taking it for collection whether or not documents of title accompany
or are
22associated with the draft. "Financing agency" includes also a bank or other person
23who similarly intervenes between persons who are in the position of seller and buyer
24in respect to the goods (s. 402.707).
AB481-ASA1,4,6
1402.310
(3) If delivery is authorized and made by way of documents of title
2otherwise than by sub. (2) then payment is due
regardless of where the goods are to
3be received at the time and place at which the buyer is to receive the documents
4regardless of where the goods are to be received; or at the time the buyer is to receive
5delivery of the electronic documents and at the seller's place of business or, if none,
6the seller's residence; and
AB481-ASA1, s. 7
7Section
7. 402.323 (2) (intro.) of the statutes is amended to read:
AB481-ASA1,4,128
402.323
(2) (intro.) Where in a case within sub. (1) a
tangible bill of lading has
9been issued in a set of parts, unless otherwise agreed if the documents are not to be
10sent from abroad the buyer may demand tender of the full set; otherwise only one
11part of the bill of lading need be tendered. Even if the agreement expressly requires
12a full set:
AB481-ASA1, s. 8
13Section
8. 402.401 (3) (a) of the statutes is amended to read:
AB481-ASA1,4,1714
402.401
(3) (a) If the seller is to deliver a
tangible document of title, title passes
15at the time when and the place where the seller delivers such documents
and, if the
16seller is to deliver an electronic document of title, title passes when the seller delivers
17the document; or
AB481-ASA1, s. 9
18Section
9. 402.401 (3) (b) of the statutes is amended to read:
AB481-ASA1,4,2119
402.401
(3) (b) If the goods are at the time of contracting already identified and
20no documents
of title are to be delivered, title passes at the time and place of
21contracting.
AB481-ASA1,5,623
402.503
(4) (b) Tender to the buyer of a nonnegotiable document of title or of
24a
written direction to record directing the bailee to deliver is sufficient tender unless
25the buyer seasonably objects, and
except as otherwise provided in ch. 409 receipt by
1the bailee of notification of the buyer's rights fixes those rights as against the bailee
2and all 3rd persons; but risk of loss of the goods and of any failure by the bailee to
3honor the nonnegotiable document of title or to obey the direction remains on the
4seller until the buyer has had a reasonable time to present the document or direction,
5and a refusal by the bailee to honor the document or to obey the direction defeats the
6tender.
AB481-ASA1,5,108
402.503
(5) (b) Tender through customary banking channels is sufficient and
9dishonor of a draft accompanying
or associated with the documents constitutes
10nonacceptance or rejection.
AB481-ASA1,5,1612
402.505
(1) (b) A nonnegotiable bill of lading to the seller or the seller's nominee
13reserves possession of the goods as security but except in a case of conditional
14delivery (s. 402.507 (2)) a nonnegotiable bill of lading naming the buyer as consignee
15reserves no security interest even though the seller retains possession
or control of
16the bill of lading.
AB481-ASA1,5,2218
402.505
(2) When shipment by the seller with reservation of a security interest
19is in violation of the contract for sale it constitutes an improper contract for
20transportation within s. 402.504 but impairs neither the rights given to the buyer by
21shipment and identification of the goods to the contract nor the seller's powers as a
22holder of a negotiable document
of title.
AB481-ASA1,6,224
402.506
(2) The right to reimbursement of a financing agency which has in good
25faith honored or purchased the draft under commitment to or authority from the
1buyer is not impaired by subsequent discovery of defects with reference to any
2relevant document which was apparently regular
on its face.
AB481-ASA1,6,54
402.509
(2) (a) On the buyer's receipt of
possession or control of a negotiable
5document of title covering the goods; or
AB481-ASA1,6,97
402.509
(2) (c) After the buyer's receipt of
possession or control of a
8nonnegotiable document of title or other
written direction to deliver
in a record, as
9provided in s. 402.503 (4) (b).
AB481-ASA1,6,1311
402.605
(2) Payment against documents made without reservation of rights
12precludes recovery of the payment for defects apparent
on the face of in the
13documents.
AB481-ASA1,6,1615
402.705
(2) (c) Such acknowledgment to the buyer by a carrier by reshipment
16or as
a warehouse
keeper; or
