Chapter 401

401.302 History History: 2009 a. 320.

401.303 401.303 Course of performance, course of dealing, and usage of trade.

401.303(1) (1) A “course of performance” is a sequence of conduct between the parties to a particular transaction that exists if any of the following apply:

401.303(1)(a) (a) The agreement of the parties with respect to the transaction involves repeated occasions for performance by a party.

401.303(1)(b) (b) The other party, with knowledge of the nature of the performance and opportunity for objection to it, accepts the performance or acquiesces in it without objection.

401.303(2) (2) A “course of dealing” is a sequence of conduct concerning previous transactions between the parties to a particular transaction that is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct.

401.303(3) (3) A “usage of trade” is any practice or method of dealing having such regularity of observance in a place, vocation, or trade as to justify an expectation that it will be observed with respect to the transaction in question. The existence and scope of such a usage are to be proved as facts. If it is established that such a usage is embodied in a trade code or similar record, the interpretation of the record is a question of law.

401.303(4) (4) A course of performance or course of dealing between the parties or usage of trade in the vocation or trade in which they are engaged or of which they are or should be aware is relevant in ascertaining the meaning of the parties’ agreement, may give particular meaning to specific terms of the agreement, and may supplement or qualify the terms of the agreement. A usage of trade applicable in the place in which part of the performance under the agreement is to occur may be so utilized as to that part of the performance.

401.303(5) (5) Except as otherwise provided in sub. (6), the express terms of an agreement and any applicable course of performance, course of dealing, or usage of trade must be construed whenever reasonable as consistent with each other. If such a construction is unreasonable, all of the following apply:

401.303(5)(a) (a) Express terms prevail over course of performance, course of dealing, and usage of trade.

401.303(5)(b) (b) Course of performance prevails over course of dealing and usage of trade.

401.303(5)(c) (c) Course of dealing prevails over usage of trade.

401.303(6) (6) Subject to s. 402.209, a course of performance is relevant to show a waiver or modification of any term inconsistent with the course of performance.

401.303(7) (7) Evidence of a relevant usage of trade offered by one party is not admissible unless that party has given the other party notice that the court finds sufficient to prevent unfair surprise to the other party.

401.303 History History: 2009 a. 320.

401.303 Annotation A single incident does not constitute a “course of dealing” within the meaning of this section. Maritime-Ontario Freight Lines, LTD. v. STI Holdings, Inc. 481 F. Supp. 2d 963 (2007).

401.304 401.304 Obligation of good faith. Every contract or duty within chs. 401 to 411 imposes an obligation of good faith in its performance and enforcement.

401.304 History History: 2009 a. 320.

401.304 Annotation This section does not support an independent cause of action for failure to act in good faith under a contract. Hauer v. Union State Bank of Wautoma, 192 Wis. 2d 576, 532 N.W.2d 456 (Ct. App. 1995).

401.304 Annotation Good faith under the code. Eisenberg, 54 MLR 1.

401.305 401.305 Remedies to be liberally administered.

401.305(1) (1) The remedies provided by chs. 401 to 411 must be liberally administered to the end that the aggrieved party may be put in as good a position as if the other party had fully performed but neither consequential or special damages nor penal damages may be had except as specifically provided in chs. 401 to 411 or by other rule of law.

401.305(2) (2) Any right or obligation declared by chs. 401 to 411 is enforceable by action unless the provision declaring it specifies a different and limited effect.

401.305 History History: 2009 a. 320.

401.306 401.306 Waiver or renunciation of claim or right after breach. A claim or right arising out of an alleged breach may be discharged in whole or in part without consideration by agreement of the aggrieved party in an authenticated record.

401.306 History History: 2009 a. 320.

401.307 401.307 Prima facie evidence by 3rd-party documents. A document in due form purporting to be a bill of lading, policy or certificate of insurance, official weigher’s or inspector’s certificate, consular invoice, or any other document authorized or required by the contract to be issued by a 3rd party shall be prima facie evidence of its own authenticity and genuineness and of the facts stated in the document by the 3rd party.

401.307 History History: 2009 a. 320.

401.308 401.308 Performance or acceptance under reservation of rights.

401.308(1) (1) A party that with explicit reservation of rights performs or promises performance or assents to performance in a manner demanded or offered by the other party does not thereby prejudice the rights reserved. Such words as “without prejudice,” “under protest,” or the like are sufficient.

401.308(2) (2) Subsection (1) does not apply to an accord and satisfaction.

401.308 History History: 2009 a. 320.

401.308 Annotation This section does not apply to “full payment” checks. Three rules relating to consideration and accord and satisfaction are discussed. Flambeau Products v. Honeywell Systems, 116 Wis. 2d 95, 341 N.W.2d 655 (1984).

401.309 401.309 Option to accelerate at will. A term providing that one party or that party’s successor in interest may accelerate payment or performance or require collateral or additional collateral “at will” or when the party “deems itself insecure,” or words of similar import, means that the party has power to do so only if that party in good faith believes that the prospect of payment or performance is impaired. The burden of establishing lack of good faith is on the party against which the power has been exercised.

401.309 History History: 2009 a. 320.

401.310 401.310 Subordinated obligations. An obligation may be issued as subordinated to performance of another obligation of the person obligated, or a creditor may subordinate its right to performance of an obligation by agreement with either the person obligated or another creditor of the person obligated. Subordination does not create a security interest as against either the common debtor or a subordinated creditor.

401.310 History History: 2009 a. 320.