LRB-3933/1
RM:kjf/kg/jd:ch
2003 - 2004 LEGISLATURE
January 7, 2004 - Introduced by Representative Gard. Referred to Committee on
Job Creation.
AB731,1,1
1An Act to create 241.02 (3) of the statutes;
relating to: credits agreements.
Analysis by the Legislative Reference Bureau
With certain exceptions, this bill prohibits any person from bringing a lawsuit
against a bank, savings bank, savings and loan association, or any affiliate of such
an institution (financial institution) based upon any of the following promises or
commitments of the financial institution, unless the promise or commitment is in
writing, sets forth relevant terms and conditions, and is signed by the financial
institution: 1) a promise or commitment to lend money, grant or extend credit, or
make any other financial accommodation; or 2) a promise or commitment to renew,
extend, modify, or permit a delay in repayment or performance of a loan, extension
of credit, or other financial accommodation. This prohibition does not apply to
transactions that are subject to the Wisconsin Consumer Act (which generally
regulates credit transactions of $25,000 or less that are entered into for personal,
family, or household purposes).
Currently, under the doctrine of promissory estoppel, the existence of an
enforceable contract may be implied if a person makes a promise, the promise is one
which the person should reasonably expect to induce action or forbearance of a
definite and substantial character, the promise induces such action or forbearance,
and injustice can be avoided only by enforcement of the promise. This bill provides
that any promise or commitment described above may not be enforced under the
doctrine of promissory estoppel. This prohibition does not apply to transactions that
are subject to the Wisconsin Consumer Act.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB731, s. 1
1Section
1. 241.02 (3) of the statutes is created to read:
AB731,2,22
241.02
(3) (a) In this subsection:
AB731,2,53
1. "Affiliate" of a bank, savings bank, or savings and loan association means
4a business entity that controls, is controlled by, or is under common control with the
5bank, savings bank, or savings and loan association.
AB731,2,86
2. "Financial institution" means a bank, savings bank, or savings and loan
7association organized under the laws of this state, another state, or the United States
8and any affiliate of such a bank, savings bank, or savings and loan association.
AB731,2,139
(b) Except as provided in par. (d), no action may be commenced against a
10financial institution on or in connection with any of the following promises or
11commitments of the financial institution unless the promise or commitment is in
12writing, sets forth relevant terms and conditions, and is signed by the financial
13institution:
AB731,2,1514
1. A promise or commitment to lend money, grant or extend credit, or make any
15other financial accommodation.
AB731,2,1816
2. A promise or commitment to renew, extend, modify, or permit a delay in
17repayment or performance of a loan, extension of credit, or other financial
18accommodation.
AB731,2,2119
(c) Except as provided in par. (d), a promise or commitment by a financial
20institution described in par. (b) may not be enforced under the doctrine of promissory
21estoppel.
AB731,3,2
1(d) Paragraphs (b) and (c) do not apply to credit transactions that are subject
2to chs. 421 to 427.
AB731,3,54
(1)
Lawsuits concerning credit agreements and related documents. This act
5first applies to actions commenced on the effective date of this subsection.
