SB472: Bill Text

SB472,8,8 (j) "Fungible goods" means any of the following:

SB472,8,10 1. Goods of which any unit, by nature or usage of trade, is the equivalent of any other like unit.

SB472,8,11 2. Goods which by agreement are treated as equivalent.

SB472,8,12 (jm) "Genuine" means free of forgery or counterfeiting.

SB472,8,14 (k) "Good faith," except as otherwise provided in ch. 405, means honesty in fact and the observance of reasonable commercial standards of fair dealing.

SB472,8,15 (km) "Holder" means any of the following:

SB472,8,17 1. The person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession.

SB472,8,19 2. A person in possession of a document of title if the goods are deliverable either to bearer or to the order of the person in possession.

SB472,8,20 3. A person in control of a negotiable electronic document of title.

SB472,8,23 (L) "Insolvency proceeding" includes an assignment for the benefit of creditors or other proceeding intended to liquidate or rehabilitate the estate of the person involved.

SB472,8,24 (Lm) "Insolvent" means any of the following:

SB472,9,2 1. Having generally ceased to pay debts in the ordinary course of business other than as a result of bona fide dispute.

SB472,9,3 2. Unable to pay debts as they become due.

SB472,9,4 3. Insolvent within the meaning of federal bankruptcy law.

SB472,9,8 (m) "Money" means a medium of exchange currently authorized or adopted by a domestic or foreign government. The term includes a monetary unit of account established by an intergovernmental organization or by agreement between 2 or more countries.

SB472,9,9 (mm) "Organization" means a person other than an individual.

SB472,9,11 (n) "Party," as distinct from a "3rd party," means a person that has engaged in a transaction or made an agreement subject to chs. 401 to 411.

SB472,9,15 (nm) "Person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision, agency, or instrumentality, public corporation, or any other legal or commercial entity.

SB472,9,21 (p) "Present value" means the amount as of a date certain of one or more sums payable in the future, discounted to the date certain by use of either an interest rate specified by the parties if that rate is not manifestly unreasonable at the time the transaction is entered into or, if an interest rate is not so specified, a commercially reasonable rate that takes into account the facts and circumstances at the time the transaction is entered into.

SB472,9,24 (pm) "Presumption" or "presumed" means that the trier of fact must find the existence of the fact presumed unless and until evidence is introduced which would support a finding of its nonexistence.

SB472,10,3 (q) "Purchase" means taking by sale, lease, discount, negotiation, mortgage, pledge, lien, security interest, issue or reissue, gift, or any other voluntary transaction creating an interest in property.

SB472,10,4 (qm) "Purchaser" means a person that takes by purchase.

SB472,10,6 (r) "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.

SB472,10,8 (rm) "Remedy" means any remedial right to which an aggrieved party is entitled with or without resort to a tribunal.

SB472,10,11 (s) "Representative" means any person empowered to act for another, including an agent, an officer of a corporation or association, and a trustee, executor, or administrator of an estate.

SB472,10,12 (sm) "Right" includes remedy.

SB472,10,25 (t) "Security interest" means an interest in personal property or fixtures which secures payment or performance of an obligation. The term also includes any interest of a consignor and a buyer of accounts, chattel paper, a payment intangible, or a promissory note in a transaction that is subject to ch. 409. The special property interest of a buyer of goods on identification of those goods to a contract for sale under s. 402.401 is not a "security interest," but a buyer may also acquire a "security interest" by complying with ch. 409. Except as otherwise provided in s. 402.505, the right of a seller or lessor of goods under ch. 402 or 411 to retain or acquire possession of the goods is not a "security interest," but a seller or lessor may also acquire a "security interest" by complying with ch. 409. The retention or reservation of title by a seller of goods notwithstanding shipment or delivery to the buyer (s. 402.401) is limited in effect to a reservation of a "security interest." Whether a transaction in the form of a lease creates a "security interest" is determined pursuant to s. 401.203.

SB472,11,2 (tm) "Send" in connection with a writing, record, or notice means any of the following:

SB472,11,7 1. To deposit in the mail or deliver for transmission by any other usual means of communication with postage or cost of transmission provided for and properly addressed and, in the case of an instrument, to an address specified thereon or otherwise agreed, or if there be none to any address reasonable under the circumstances.

SB472,11,9 2. In any other way to cause to be received any record or notice within the time it would have arrived if properly sent.

SB472,11,11 (u) "Signed" includes any symbol executed or adopted with present intention to adopt or accept a writing.

SB472,11,14 (um) "State" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.

SB472,11,15 (v) "Surety" includes a guarantor or other secondary obligor.

SB472,11,17 (vm) "Term" means a portion of an agreement that relates to a particular matter.

SB472,11,19 (w) "Unauthorized signature" means a signature made without actual, implied, or apparent authority. The term includes a forgery.

SB472,11,21 (wm) "Warehouse receipt" means a receipt issued by a person engaged in the business of storing goods for hire.

SB472,11,23 (x) "Writing" includes printing, typewriting, or any other intentional reduction to tangible form. "Written" has a corresponding meaning.

SB472,11,25 401.202 Notice; knowledge. (1) Subject to sub. (6), a person has "notice" of a fact if the person satisfies any of the following:

SB472,12,1 (a) Has actual knowledge of it.

SB472,12,2 (b) Has received a notice or notification of it.

SB472,12,4 (c) From all the facts and circumstances known to the person at the time in question, has reason to know that it exists.

SB472,12,5 (2) "Knowledge" means actual knowledge.

SB472,12,7 (3) "Discover," "learn," or words of similar import refer to knowledge rather than to notice.

SB472,12,10 (4) A person "notifies" or "gives" a notice or notification to another by taking such steps as may be reasonably required to inform the other in ordinary course, whether or not the other person actually comes to know of it.

SB472,12,12 (5) Subject to sub. (6), a person "receives" a notice or notification when any of the following apply:

SB472,12,13 (a) It comes to that person's attention.

SB472,12,16 (b) It is duly delivered in a form reasonable under the circumstances at the place of business through which the contract was made or at another location held out by that person as the place for receipt of such communications.

SB472,13,2 (6) Notice, knowledge, or a notice or notification received by an organization is effective for a particular transaction from the time it is brought to the attention of the individual conducting that transaction and, in any event, from the time it would have been brought to the individual's attention if the organization had exercised due diligence. An organization exercises due diligence if it maintains reasonable routines for communicating significant information to the person conducting the transaction and there is reasonable compliance with the routines. Due diligence does not require an individual acting for the organization to communicate information unless the communication is part of the individual's regular duties or the individual has reason to know of the transaction and that the transaction would be materially affected by the information.

SB472,13,5 401.203 Lease distinguished from security interest. (1) Whether a transaction in the form of a lease creates a lease or security interest is determined by the facts of each case.

SB472,13,9 (2) A transaction in the form of a lease creates a security interest if the consideration that the lessee is to pay the lessor for the right to possession and use of the goods is an obligation for the term of the lease and is not subject to termination by the lessee, and if any of the following apply:

SB472,13,11 (a) The original term of the lease is equal to or greater than the remaining economic life of the goods.

SB472,13,13 (b) The lessee is bound to renew the lease for the remaining economic life of the goods or is bound to become the owner of the goods.

SB472,13,16 (c) The lessee has an option to renew the lease for the remaining economic life of the goods for no additional consideration or for nominal additional consideration upon compliance with the lease agreement.

SB472,13,19 (d) The lessee has an option to become the owner of the goods for no additional consideration or for nominal additional consideration upon compliance with the lease agreement.

SB472,13,21 (3) A transaction in the form of a lease does not create a security interest merely because of any of the following:

SB472,13,24 (a) The present value of the consideration the lessee is obligated to pay the lessor for the right to possession and use of the goods is substantially equal to or is greater than the fair market value of the goods at the time the lease is entered into.

SB472,13,25 (b) The lessee assumes risk of loss of the goods.

SB472,14,2 (c) The lessee agrees to pay taxes, insurance, filing, recording, or registration fees, or service or maintenance costs with respect to the goods.

SB472,14,4 (d) The lessee has an option to renew the lease or to become the owner of the goods.

SB472,14,7 (e) The lessee has an option to renew the lease for a fixed rent that is equal to or greater than the reasonably predictable fair market rent for the use of the goods for the term of the renewal at the time the option is to be performed.

SB472,14,10 (f) The lessee has an option to become the owner of the goods for a fixed price that is equal to or greater than the reasonably predictable fair market value of the goods at the time the option is to be performed.

SB472,14,13 (4) Additional consideration is nominal if it is less than the lessee's reasonably predictable cost of performing under the lease agreement if the option is not exercised. Additional consideration is not nominal if any of the following apply:

SB472,14,16 (a) When the option to renew the lease is granted to the lessee, the rent is stated to be the fair market rent for the use of the goods for the term of the renewal determined at the time the option is to be performed.

SB472,14,19 (b) When the option to become the owner of the goods is granted to the lessee, the price is stated to be the fair market value of the goods determined at the time the option is to be performed.

SB472,14,23 (5) The "remaining economic life of the goods" and "reasonably predictable" fair market rent, fair market value, or cost of performing under the lease agreement must be determined with reference to the facts and circumstances at the time the transaction is entered into.

SB472,15,3 401.204 Value. Except as otherwise provided in chs. 403, 404, 405, and 406, a person gives value for rights if the person acquires them under any of the following circumstances:

SB472,15,6 (1) In return for a binding commitment to extend credit or for the extension of immediately available credit, whether or not drawn upon and whether or not a charge-back is provided for in the event of difficulties in collection.

SB472,15,7 (2) As security for, or in total or partial satisfaction of, a preexisting claim.

SB472,15,8 (3) By accepting delivery under a preexisting contract for purchase.

SB472,15,9 (4) In return for any consideration sufficient to support a simple contract.

SB472,15,12 401.205 Reasonable time; seasonableness. (1) Whether a time for taking an action required by chs. 401 to 411 is reasonable depends on the nature, purpose, and circumstances of the action.

SB472,15,14 (2) An action is taken seasonably if it is taken at or within the time agreed or, if no time is agreed, at or within a reasonable time.

SB472,15,15 Subchapter iii

SB472,15,17 TERRITORIAL APPLICABILITY AND GENERAL RULES

SB472,15,19 401.301 Territorial applicability; parties' power to choose applicable law.

SB472,15,23 (1) Except as otherwise provided in this section, when a transaction bears a reasonable relation to this state and to another state or nation the parties may agree that the law either of this state or of such other state or nation shall govern their rights and duties.

SB472,16,3 (2) In the absence of an agreement under sub. (1), and except as provided in sub. (3), chs. 401 to 411 apply to transactions bearing an appropriate relation to this state.

SB472,16,6 (3) If one of the following provisions of chs. 401 to 411 specifies the applicable law, that provision governs and a contrary agreement is effective only to the extent permitted by the law so specified:

SB472,16,7 (a) Section 402.402.

SB472,16,8 (b) Sections 411.105 and 411.106.

SB472,16,9 (c) Section 404.102.

SB472,16,10 (d) Section 410.507.

SB472,16,11 (e) Section 405.116.

SB472,16,12 (f) Section 406.103.

SB472,16,13 (g) Section 408.110.

SB472,16,14 (h) Sections 409.301 through 409.307.

SB472,16,17 401.302 Variation by agreement. (1) Except as otherwise provided in sub. (2) or elsewhere in chs. 401 to 411, the effect of provisions of chs. 401 to 411 may be varied by agreement.

SB472,16,23 (2) The obligations of good faith, diligence, reasonableness, and care prescribed by chs. 401 to 411 may not be disclaimed by agreement. The parties, by agreement, may determine the standards by which the performance of those obligations is to be measured if those standards are not manifestly unreasonable. Whenever chs. 401 to 411 require any action to be taken within a reasonable time, any time which is not manifestly unreasonable may be fixed by agreement.

SB472,17,3 (3) The presence in certain provisions of chs. 401 to 411 of the phrase "unless otherwise agreed," or words of similar import, does not imply that the effect of other provisions may not be varied by agreement under this section.