Wisconsin Legislature: 411.212(2)(f)

411.208(3) (3) Although an attempt at modification or rescission does not satisfy the requirements of sub. (2), it may operate as a waiver.

411.208(4) (4) A party who has made a waiver affecting an executory portion of a lease contract may retract the waiver by reasonable notification received by the other party that strict performance shall be required of any term waived, unless the retraction would be unjust in view of a material change of position in reliance on the waiver.

411.208 History History: 1991 a. 148.

411.209 411.209 Lessee under finance lease as beneficiary of supply contract.

411.209(1)(1) The benefit of a supplier's promises to the lessor under the supply contract and of all warranties, whether express or implied, including those of a 3rd party provided in connection with or as part of the supply contract, extends to the lessee to the extent of the lessee's leasehold interest under a finance lease related to the supply contract, but is subject to the terms of the warranty and of the supply contract and all defenses or claims arising therefrom.

411.209(2) (2) The extension of the benefit of a supplier's promises and of warranties to the lessee does not modify the rights and obligations of the parties to the supply contract, whether arising therefrom or otherwise, or impose any duty or liability under the supply contract on the lessee.

411.209(3) (3) A modification or rescission of the supply contract by the supplier and the lessor is effective between the supplier and the lessee unless, before the modification or rescission, the supplier receives notice that the lessee has entered into a finance lease related to the supply contract. If the modification or rescission is effective between the supplier and the lessee, the lessor is considered to have assumed, in addition to the obligations of the lessor to the lessee under the lease contract, promises of the supplier to the lessor and warranties that were so modified or rescinded as they existed and were available to the lessee before modification or rescission.

411.209(4) (4) In addition to the extension of the benefit of the supplier's promises and of warranties to the lessee under sub. (1), the lessee retains all rights that the lessee may have against the supplier which arise from an agreement between the lessee and the supplier or under other law.

411.209 History History: 1991 a. 148.

411.210 411.210 Express warranties.

411.210(1)(1) Express warranties by the lessor are created as follows:

411.210(1)(a) (a) Any affirmation of fact or promise made by the lessor to the lessee that relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods will conform to the affirmation or promise.

411.210(1)(b) (b) Any description of the goods that is made part of the basis of the bargain creates an express warranty that the goods will conform to the description.

411.210(1)(c) (c) Any sample or model that is made part of the basis of the bargain creates an express warranty that the whole of the goods will conform to the sample or model.

411.210(2) (2) It is not necessary to the creation of an express warranty that the lessor use formal words, such as “warrant" or “guarantee", or that the lessor have a specific intention to make a warranty, but an affirmation merely of the value of the goods or a statement purporting to be merely the lessor's opinion or commendation of the goods does not create a warranty.

411.210 History History: 1991 a. 148.

411.211 411.211 Warranties against interference and against infringement; lessee's obligation against infringement.

411.211(1)(1) There is in a lease contract a warranty that for the lease term no person holds a claim to or interest in the goods that arose from an act or omission of the lessor, other than a claim by way of infringement or the like, that will interfere with the lessee's enjoyment of its leasehold interest.

411.211(2) (2) Except in a finance lease, there is in a lease contract by a lessor who is a merchant regularly dealing in goods of the kind a warranty that the goods are delivered free of the rightful claim of any person by way of infringement or the like.

411.211(3) (3) A lessee who furnishes specifications to a lessor or a supplier shall hold the lessor and the supplier harmless against any claim by way of infringement or the like that arises out of compliance with the specifications.

411.211 History History: 1991 a. 148.

411.212 411.212 Implied warranty of merchantability.

411.212(1)(1) Except in a finance lease, a warranty that the goods will be merchantable is implied in a lease contract if the lessor is a merchant with respect to goods of that kind.

411.212(2) (2) To be merchantable, goods shall meet all of the following minimum standards:

411.212(2)(a) (a) Pass without objection in the trade under the description in the lease agreement.

411.212(2)(b) (b) If fungible goods, be of fair average quality within the description.

411.212(2)(c) (c) Be fit for the ordinary purposes for which goods of that type are used.

411.212(2)(d) (d) Run, within the variation permitted by the lease agreement, of even kind, quality and quantity within each unit and among all units involved.

411.212(2)(e) (e) Be adequately contained, packaged and labeled as the lease agreement requires.

411.212(2)(f) (f) Conform to any promises or affirmations of fact made on the container or label.

411.212(3) (3) Other implied warranties may arise from course of dealing or usage of trade.

411.212 History History: 1991 a. 148.

411.213 411.213 Implied warranty of fitness for particular purpose. Except in a finance lease, if the lessor when the lease contract is made has reason to know of any particular purpose for which the goods are required and that the lessee is relying on the lessor's skill or judgment to select or furnish suitable goods, there is in the lease contract an implied warranty that the goods will be fit for that purpose.

411.213 History History: 1991 a. 148.

411.214 411.214 Exclusion or modification of warranties.

411.214(1)(1) Words or conduct relevant to the creation of an express warranty and words or conduct tending to negate or limit a warranty shall be construed wherever reasonable as consistent with each other; but, subject to s. 411.202, negation or limitation is inoperative to the extent that the construction is unreasonable.

411.214(2) (2) Subject to sub. (3), to exclude or modify the implied warranty of merchantability or a part of it the language shall mention “merchantability", be by a writing and be conspicuous. Subject to sub. (3), to exclude or modify an implied warranty of fitness the exclusion shall be by a writing and be conspicuous. Language to exclude all implied warranties of fitness is sufficient if it is in writing, is conspicuous and states, for example, “There is no warranty that the goods will be fit for a particular purpose."

411.214(3) (3) Notwithstanding sub. (2), but subject to sub. (4), all of the following apply:

411.214(3)(a) (a) Unless the circumstances indicate otherwise, all implied warranties are excluded by expressions such as “as is", or “with all faults", or by other language that in common understanding calls the lessee's attention to the exclusion of warranties and makes plain that there is no implied warranty, if in writing and conspicuous.

411.214(3)(b) (b) If the lessee before entering into the lease contract examines the goods or the sample or model as fully as desired or refuses to examine the goods, there is no implied warranty with regard to defects that an examination ought in the circumstances to have revealed.

411.214(3)(c) (c) An implied warranty may also be excluded or modified by course of dealing, course of performance, or usage of trade.

411.214(4) (4) To exclude or modify a warranty against interference or against infringement or any part of that warranty, the language shall be specific, be by a writing, and be conspicuous, unless the circumstances, including course of performance, course of dealing, or usage of trade, give the lessee reason to know that the goods are being leased subject to a claim or interest of any person.

411.214 History History: 1991 a. 148.

411.215 411.215 Cumulation and conflict of warranties express or implied. Warranties, whether express or implied, shall be construed as consistent with each other and as cumulative, but if that construction is unreasonable, the intention of the parties determines which warranty is dominant. In ascertaining that intention, all of the following apply:

411.215(1) (1) Exact or technical specifications displace an inconsistent sample or model or general language of description.

411.215(2) (2) A sample from an existing bulk displaces inconsistent general language of description.

411.215(3) (3) Express warranties displace inconsistent implied warranties other than an implied warranty of fitness for a particular purpose.

411.215 History History: 1991 a. 148.

411.216 411.216 Third-party beneficiaries of express and implied warranties. A warranty to or for the benefit of a lessee under this chapter, whether express or implied, extends to any natural person who is in the family or household of the lessee or who is a guest in the lessee's home if it is reasonable to expect that the person may use, consume or be affected by the goods and who is injured in person by breach of the warranty. This section does not displace principles of law and equity that extend a warranty to or for the benefit of a lessee to other persons. The operation of this section may not be excluded, modified or limited, but an exclusion, modification or limitation of the warranty, including any with respect to rights and remedies, effective against the lessee is also effective against a beneficiary designated under this section.

411.216 History History: 1991 a. 148.

411.217 411.217 Identification. Identification of goods as goods to which a lease contract refers may be made at any time and in any manner explicitly agreed to by the parties. In the absence of explicit agreement, identification occurs when any of the following occurs:

411.217(1) (1) The lease contract is made if the lease contract is for a lease of goods that are existing and identified.

411.217(2) (2) The goods are shipped, marked, or otherwise designated by the lessor as goods to which the lease contract refers, if the lease contract is for a lease of goods that are not existing and identified.

411.217(3) (3) The young are conceived, if the lease contract is for a lease of unborn young of animals.

411.217 History History: 1991 a. 148.

411.218 411.218 Insurance and proceeds.

411.218(1)(1) A lessee obtains an insurable interest when existing goods are identified to the lease contract even though the goods identified are nonconforming and the lessee has an option to reject them.

411.218(2) (2) If a lessee has an insurable interest only by reason of the lessor's identification of the goods, the lessor, until default or insolvency or notification to the lessee that identification is final, may substitute other goods for those identified.

411.218(3) (3) Notwithstanding a lessee's insurable interest under subs. (1) and (2), the lessor retains an insurable interest until an option to buy has been exercised by the lessee and risk of loss has passed to the lessee.

411.218(4) (4) Nothing in this section impairs an insurable interest recognized under any other statute or rule of law.

411.218(5) (5) The parties, by agreement, may determine that one or more parties have an obligation to obtain and, pay for insurance covering the goods and, by agreement, may determine the beneficiary of the proceeds of the insurance.

411.218 History History: 1991 a. 148.

411.219 411.219 Risk of loss.

411.219(1)(1) Except in the case of a finance lease, risk of loss is retained by the lessor and does not pass to the lessee. In the case of a finance lease, risk of loss passes to the lessee.

411.219(2) (2) Subject to s. 411.220, if risk of loss is to pass to the lessee and the time of passage is not stated, all of the following apply:

411.219(2)(a) (a) If the lease contract requires or authorizes the goods to be shipped by carrier and the lease contract does not require delivery at a particular destination, the risk of loss passes to the lessee when the goods are delivered to the carrier; but if the lease contract does require delivery at a particular destination and the goods are tendered while in the possession of the carrier, the risk of loss passes to the lessee when the goods are so tendered as to enable the lessee to take delivery.

411.219(2)(b) (b) If the goods are held by a bailee to be delivered without being moved, the risk of loss passes to the lessee on acknowledgment by the bailee of the lessee's right to possession of the goods.

411.219(2)(c) (c) In any case not within par. (a) or (b), the risk of loss passes to the lessee on the lessee's receipt of the goods if the lessor, or, in the case of a finance lease, the supplier, is a merchant; otherwise the risk passes to the lessee on tender of delivery.

411.219 History History: 1991 a. 148.

411.220 411.220 Effect of default on risk of loss.

411.220(1)(1) If risk of loss is to pass to the lessee and the time of passage is not stated, all of the following apply:

411.220(1)(a) (a) If a tender or delivery of goods so fails to conform to the lease contract as to give a right of rejection, the risk of their loss remains with the lessor, or, in the case of a finance lease, the supplier, until cure or acceptance.

411.220(1)(b) (b) If the lessee rightfully revokes acceptance, the lessee, to the extent of any deficiency in his or her effective insurance coverage, may treat the risk of loss as having remained with the lessor from the beginning.

411.220(2) (2) Whether or not risk of loss is to pass to the lessee, if the lessee as to conforming goods already identified to a lease contract repudiates or is otherwise in default under the lease contract, the lessor, or, in the case of a finance lease, the supplier, to the extent of any deficiency in his or her effective insurance coverage may treat the risk of loss as resting on the lessee for a commercially reasonable time.

411.220 History History: 1991 a. 148.

411.221 411.221 Casualty to identified goods. If a lease contract requires goods identified when the lease contract is made, and the goods suffer casualty without fault of the lessee, the lessor or the supplier before delivery, or the goods suffer casualty before risk of loss passes to the lessee under the lease agreement or s. 411.219, then all of the following apply:

411.221(1) (1) If the loss is total, the lease contract is avoided.

411.221(2) (2) If the loss is partial or the goods have so deteriorated as to no longer conform to the lease contract, the lessee may nevertheless demand inspection and at his or her option either treat the lease contract as avoided or, except in a finance lease that is not a consumer lease, accept the goods with due allowance from the rent payable for the balance of the lease term for the deterioration or the deficiency in quantity but without further right against the lessor.

411.221 History History: 1991 a. 148.

subch. III of ch. 411 SUBCHAPTER III

EFFECT OF LEASE CONTRACT

411.301 411.301 Enforceability of lease contract. Except as otherwise provided in this chapter, a lease contract is effective and enforceable according to its terms between the parties, against purchasers of the goods and against creditors of the parties.

411.301 History History: 1991 a. 148.

411.302 411.302 Title to and possession of goods. Except as otherwise provided in this chapter, this chapter applies whether the lessor or a 3rd party has title to the goods, and whether the lessor, the lessee, or a 3rd party has possession of the goods, notwithstanding any statute or rule of law that possession or the absence of possession is fraudulent.

411.302 History History: 1991 a. 148.

411.303 411.303 Alienability of party's interest under lease contract or of lessor's residual interest in goods; delegation of performance; transfer of rights.

411.303(1)(1) In this section, “creation of a security interest" includes the sale of a lease contract that is subject to ch. 409 under s. 409.109 (1) (c).

411.303(2) (2) Except as provided in sub. (3) and s. 409.407, a provision in a lease agreement that prohibits the voluntary or involuntary transfer, including a transfer by sale, sublease, creation or enforcement of a security interest, or attachment, levy, or other judicial process, of an interest of a party under the lease contract or of the lessor's residual interest in the goods, or that makes such a transfer an event of default, gives rise to the rights and remedies provided in sub. (4), but a transfer that is prohibited or is an event of default under the lease agreement is otherwise effective.

411.303(3) (3) A provision in a lease agreement that prohibits a transfer of a right to damages for default with respect to the whole lease contract or of a right to payment arising out of the transferor's due performance of the transferor's entire obligation, or that makes such a transfer an event of default, is not enforceable, and such a transfer is not a transfer that materially impairs the prospect of obtaining return performance by, materially changes the duty of, or materially increases the burden or risk imposed on, the other party to the lease contract within the purview of sub. (4).