Amendment ASA1-AB481

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, s. 1 Section 1. 99.01 (2) of the statutes is amended to read:

AB481-ASA1,3,5 99.01 (2) "Property" means goods as defined in s. 407.102 (1) (f) (g). "Property" includes food; agricultural and commercial products, commodities or equipment; household furnishings; automobiles, boats, snowmobiles or other vehicles and conveyances; and all other items of a personal, family, household, agricultural, business or commercial nature which may be the subject of a contract of storage.

AB481-ASA1, s. 2 Section 2. 137.12 (6) of the statutes is created to read:

AB481-ASA1,3,8 137.12 (6) To the extent there is a conflict between this subchapter and ch. 407, ch. 407 governs.

AB481-ASA1, s. 3 Section 3. 137.24 (1) of the statutes is amended to read:

AB481-ASA1,3,12 137.24 (1) In this section, "transferable record" means an electronic record that would be a note under ch. 403 or a record under ch. 407 if the electronic record were in writing.

AB481-ASA1, s. 4 Section 4. 402.103 (3) (dm) of the statutes is created to read:

AB481-ASA1,3,14 402.103 (3) (dm) "Control" — s. 407.106.

AB481-ASA1, s. 5 Section 5. 402.104 (2) of the statutes is amended to read:

AB481-ASA1,3,24 402.104 (2) "Financing agency" means a bank, finance company or other person who in the ordinary course of business makes advances against goods or documents of title or who by arrangement with either the seller or the buyer intervenes in ordinary course to make or collect payment due or claimed under the contract for sale, as by purchasing or paying the seller's draft or making advances against it or by merely taking it for collection whether or not documents of title accompany or are associated with the draft. "Financing agency" includes also a bank or other person who similarly intervenes between persons who are in the position of seller and buyer in respect to the goods (s. 402.707).

AB481-ASA1, s. 6 Section 6. 402.310 (3) of the statutes is amended to read:

AB481-ASA1,4,6 402.310 (3) If delivery is authorized and made by way of documents of title otherwise than by sub. (2) then payment is due regardless of where the goods are to be received at the time and place at which the buyer is to receive the documents regardless of where the goods are to be received; or at the time the buyer is to receive delivery of the electronic documents and at the seller's place of business or, if none, the seller's residence; and

AB481-ASA1, s. 7 Section 7. 402.323 (2) (intro.) of the statutes is amended to read:

AB481-ASA1,4,12 402.323 (2) (intro.) Where in a case within sub. (1) a tangible bill of lading has been issued in a set of parts, unless otherwise agreed if the documents are not to be sent from abroad the buyer may demand tender of the full set; otherwise only one part of the bill of lading need be tendered. Even if the agreement expressly requires a full set:

AB481-ASA1, s. 8 Section 8. 402.401 (3) (a) of the statutes is amended to read:

AB481-ASA1,4,17 402.401 (3) (a) If the seller is to deliver a tangible document of title, title passes at the time when and the place where the seller delivers such documents and, if the seller is to deliver an electronic document of title, title passes when the seller delivers the document; or

AB481-ASA1, s. 9 Section 9. 402.401 (3) (b) of the statutes is amended to read:

AB481-ASA1,4,21 402.401 (3) (b) If the goods are at the time of contracting already identified and no documents of title are to be delivered, title passes at the time and place of contracting.

AB481-ASA1, s. 10 Section 10. 402.503 (4) (b) of the statutes is amended to read:

AB481-ASA1,5,6 402.503 (4) (b) Tender to the buyer of a nonnegotiable document of title or of a written direction to record directing the bailee to deliver is sufficient tender unless the buyer seasonably objects, and except as otherwise provided in ch. 409 receipt by the bailee of notification of the buyer's rights fixes those rights as against the bailee and all 3rd persons; but risk of loss of the goods and of any failure by the bailee to honor the nonnegotiable document of title or to obey the direction remains on the seller until the buyer has had a reasonable time to present the document or direction, and a refusal by the bailee to honor the document or to obey the direction defeats the tender.

AB481-ASA1, s. 11 Section 11. 402.503 (5) (b) of the statutes is amended to read:

AB481-ASA1,5,10 402.503 (5) (b) Tender through customary banking channels is sufficient and dishonor of a draft accompanying or associated with the documents constitutes nonacceptance or rejection.

AB481-ASA1, s. 12 Section 12. 402.505 (1) (b) of the statutes is amended to read:

AB481-ASA1,5,16 402.505 (1) (b) A nonnegotiable bill of lading to the seller or the seller's nominee reserves possession of the goods as security but except in a case of conditional delivery (s. 402.507 (2)) a nonnegotiable bill of lading naming the buyer as consignee reserves no security interest even though the seller retains possession or control of the bill of lading.

AB481-ASA1, s. 13 Section 13. 402.505 (2) of the statutes is amended to read:

AB481-ASA1,5,22 402.505 (2) When shipment by the seller with reservation of a security interest is in violation of the contract for sale it constitutes an improper contract for transportation within s. 402.504 but impairs neither the rights given to the buyer by shipment and identification of the goods to the contract nor the seller's powers as a holder of a negotiable document of title.

AB481-ASA1, s. 14 Section 14. 402.506 (2) of the statutes is amended to read:

AB481-ASA1,6,2 402.506 (2) The right to reimbursement of a financing agency which has in good faith honored or purchased the draft under commitment to or authority from the buyer is not impaired by subsequent discovery of defects with reference to any relevant document which was apparently regular on its face.

AB481-ASA1, s. 15 Section 15. 402.509 (2) (a) of the statutes is amended to read:

AB481-ASA1,6,5 402.509 (2) (a) On the buyer's receipt of possession or control of a negotiable document of title covering the goods; or

AB481-ASA1, s. 16 Section 16. 402.509 (2) (c) of the statutes is amended to read:

AB481-ASA1,6,9 402.509 (2) (c) After the buyer's receipt of possession or control of a nonnegotiable document of title or other written direction to deliver in a record, as provided in s. 402.503 (4) (b).

AB481-ASA1, s. 17 Section 17. 402.605 (2) of the statutes is amended to read:

AB481-ASA1,6,13 402.605 (2) Payment against documents made without reservation of rights precludes recovery of the payment for defects apparent on the face of in the documents.

AB481-ASA1, s. 18 Section 18. 402.705 (2) (c) of the statutes is amended to read:

AB481-ASA1,6,16 402.705 (2) (c) Such acknowledgment to the buyer by a carrier by reshipment or as a warehouse keeper; or

AB481-ASA1, s. 19 Section 19. 402.705 (3) (c) of the statutes is amended to read:

AB481-ASA1,6,20 402.705 (3) (c) If a negotiable document of title has been issued for goods the bailee is not obliged to obey a notification to stop until surrender of possession or control of the document.

AB481-ASA1, s. 20 Section 20. 404.104 (3) (fc) of the statutes is created to read:

AB481-ASA1,6,22 404.104 (3) (fc) "Control" — s. 407.106.

AB481-ASA1, s. 21 Section 21. 404.210 (3) (intro.) of the statutes is amended to read:

AB481-ASA1,7,4 404.210 (3) (intro.) Receipt by a collecting bank of a final settlement for an item is a realization on its security interest in the item, accompanying documents and proceeds. So long as the bank does not receive final settlement for the item or give up possession of the item or possession or control of the accompanying documents for purposes other than collection, the security interest continues to that extent and is subject to ch. 409, but all of the following apply:

AB481-ASA1, s. 22 Section 22. Chapter 407 of the statutes is repealed and recreated to read:

AB481-ASA1,7,6 CHAPTER 407

AB481-ASA1,7,7 Uniform commercial code

AB481-ASA1,7,8 — documents of title

AB481-ASA1,7,9 Subchapter I

AB481-ASA1,7,10 General

AB481-ASA1,7,12 407.101 Short title. (1) This chapter may be cited as uniform commercial code — documents of title.

AB481-ASA1,7,14 407.102 Definitions and index of definitions. (1) In this chapter, unless the context otherwise requires:

AB481-ASA1,7,16 (a) "Bailee" means a person that by a warehouse receipt, bill of lading, or other document of title acknowledges possession of goods and contracts to deliver them.

AB481-ASA1,7,17 (b) "Carrier" means a person that issues a bill of lading.

AB481-ASA1,7,19 (c) "Consignee" means a person named in a bill of lading to which or to whose order the bill promises delivery.

AB481-ASA1,7,21 (d) "Consignor" means a person named in a bill of lading as the person from which the goods have been received for shipment.

AB481-ASA1,7,24 (e) "Delivery order" means a record that contains an order to deliver goods directed to a warehouse, carrier, or other person that in the ordinary course of business issues warehouse receipts or bills of lading.

AB481-ASA1,8,2 (f) "Good faith" means honesty in fact and the observance of reasonable commercial standards of fair dealing.

AB481-ASA1,8,4 (g) "Goods" means all things that are treated as movable for the purposes of a contract for storage or transportation.

AB481-ASA1,8,10 (h) "Issuer" means a bailee that issues a document of title or, in the case of an unaccepted delivery order, the person that orders the possessor of goods to deliver. The term includes a person for which an agent or employee purports to act in issuing a document if the agent or employee has real or apparent authority to issue documents, even if the issuer did not receive any goods, the goods were misdescribed, or in any other respect the agent or employee violated the issuer's instructions.

AB481-ASA1,8,14 (i) "Person entitled under the document" means the holder, in the case of a negotiable document of title, or the person to which delivery of the goods is to be made by the terms of, or pursuant to instructions in a record under, a nonnegotiable document of title.

AB481-ASA1,8,16 (j) "Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

AB481-ASA1,8,18 (k) "Shipper" means a person that enters into a contract of transportation with a carrier.

AB481-ASA1,8,20 (L) "Sign" means, with present intent to authenticate or adopt a record, any of the following:

AB481-ASA1,8,21 1. To execute or adopt a tangible symbol.

AB481-ASA1,8,23 2. To attach to or logically associate with the record an electronic sound, symbol, or process.

AB481-ASA1,8,25 (m) "Warehouse" means a person engaged in the business of storing goods for hire.

AB481-ASA1,9,2 (2) Definitions in other chapters applying to this chapter and the sections in which they appear are:

AB481-ASA1,9,3 (a) "Contract for sale," s. 402.106.

AB481-ASA1,9,4 (b) "Lessee in ordinary course of business," s. 411.103.

AB481-ASA1,9,5 (c) "Receipt" of goods, s. 402.103.

AB481-ASA1,9,7 (3) In addition, ch. 401 contains general definitions and principles of construction and interpretation applicable throughout this chapter.

AB481-ASA1,9,10 407.103 Relation of chapter to treaty or statute. (1) This chapter is subject to any treaty or statute of the United States or a regulatory statute of this state to the extent the treaty, statute, or regulatory statute is applicable.

AB481-ASA1,9,15 (2) This chapter does not repeal or modify any law prescribing the form or contents of a document of title or the services or facilities to be afforded by a bailee, or otherwise regulating a bailee's businesses in respects not specifically treated in this chapter. However, violation of these laws does not affect the status of a document of title that otherwise complies with the definition of a document of title.

AB481-ASA1,9,20 (3) This chapter modifies, limits, and supersedes the federal Electronic Signatures in Global and National Commerce Act, 15 USC 7001 to 7031, but does not modify, limit, or supersede section 101 (c) of that act, 15 USC 7001(c), or authorize electronic delivery of any of the notices described in section 103 (b) of that act, 15 USC 7003 (b).

AB481-ASA1,9,22 (4) To the extent there is a conflict between subch. II of ch. 137 and this chapter, this chapter governs.

AB481-ASA1,9,25 407.104 Negotiable and nonnegotiable document of title. (1) Except as provided in sub. (3), a document of title is negotiable if by its terms the goods are to be delivered to bearer or to the order of a named person.

AB481-ASA1,10,4 (2) A document of title other than one described in sub. (1) is nonnegotiable. A bill of lading that states that the goods are consigned to a named person is not made negotiable by a provision that the goods are to be delivered only against an order in a record signed by the same or another named person.

AB481-ASA1,10,6 (3) A document of title is nonnegotiable if, at the time it is issued, the document has a conspicuous legend, however expressed, that it is nonnegotiable.

AB481-ASA1,10,10 407.105 Reissuance in alternative medium. (1) Upon request of a person entitled under an electronic document of title, the issuer of the electronic document may issue a tangible document of title as a substitute for the electronic document if all of the following apply:

AB481-ASA1,10,12 (a) The person entitled under the electronic document surrenders control of the document to the issuer.

AB481-ASA1,10,14 (b) The tangible document when issued contains a statement that it is issued in substitution for the electronic document.

AB481-ASA1,10,16 (2) Upon issuance of a tangible document of title in substitution for an electronic document of title in accordance with sub. (1), all of the following apply:

AB481-ASA1,10,17 (a) The electronic document ceases to have any effect or validity.

AB481-ASA1,10,21 (b) The person that procured issuance of the tangible document warrants to all subsequent persons entitled under the tangible document that the warrantor was a person entitled under the electronic document when the warrantor surrendered control of the electronic document to the issuer.

AB481-ASA1,10,24 (3) Upon request of a person entitled under a tangible document of title, the issuer of the tangible document may issue an electronic document of title as a substitute for the tangible document if all of the following apply:

AB481-ASA1,11,2 (a) The person entitled under the tangible document surrenders possession of the document to the issuer.