Chapter 402

402.718   Liquidation or limitation of damages; deposits.

402.719   Contractual modification or limitation of remedy.

402.720   Effect of “cancellation” or “rescission” on claims for antecedent breach.

402.721   Remedies for fraud.

402.722   Who can sue 3rd parties for injury to goods.

402.723   Proof of market price: time and place.

402.724   Admissibility of market quotations.

402.725   Statute of limitations in contracts for sale.

Ch. 402 Cross-reference Cross-reference: See definitions in s. 401.201.

subch. I of ch. 402 SUBCHAPTER I

SHORT TITLE, GENERAL CONSTRUCTION
AND SUBJECT MATTER

402.101 402.101 Short title. This chapter shall be known and may be cited as uniform commercial code — sales.

402.102 402.102 Scope; certain security and other transactions excluded from this chapter. Unless the context otherwise requires, this chapter applies to transactions in goods; it does not apply to any transaction which although in the form of an unconditional contract to sell or present sale is intended to operate only as a security transaction nor does this chapter impair or repeal any statute regulating sales to consumers, farmers or other specified classes of buyers.

402.102 Annotation A consignment that involves a delivery of goods to a merchant who has been induced to accept them by an agreement from the consignor that permits their return in lieu of payment if they are not resold is a security consignment governed by ch. 409, as contrasted to a true consignment. Clark Oil & Refining Co. v. Liddicoat, 65 Wis. 2d 612, 223 N.W.2d 530 (1974).

402.102 Annotation A mixed contract for goods and services is subject to this chapter if the predominant factor is a transaction of sale, with labor incidentally involved. Van Sistine v. Tollard, 95 Wis. 2d 678, 291 N.W.2d 636 (Ct. App. 1980).

402.102 Annotation A contract for development of computer software is primarily a service contract and is not subject to the Uniform Commercial Code. Micro-Managers, Inc. v. Gregory, 147 Wis. 2d 500, 434 N.W.2d 97 (Ct. App. 1988).

402.102 Annotation This chapter does not just apply to a sale as that term is defined in s. 402.106 (6), but to the more general aspect of commerce: “transactions in goods.” The reach of Uniform Commercial Code (UCC) article 2, adopted as this chapter, goes considerably beyond the confines of the type of transaction that the UCC itself defines to be a sale, namely, the passing of title from a party called the seller to one denominated a buyer for a price. Estate of Kriefall v. Sizzler USA Franchise, Inc., 2011 WI App 101, 335 Wis. 2d 151, 801 N.W.2d 781, 09-1212.

402.102 Annotation Wisconsin applies the “predominant purpose” test to determine whether a mixed contract is subject to the Uniform Commercial Code. The predominant purpose test relies on both quantitative and subjective factors, including the language of the contract, the nature of the business of the supplier, the intrinsic worth of the materials, the circumstances of the parties, and the primary objective they hoped to achieve by entering into the contract. Ultimately, the court must consider both objective and subjective factors to determine whether, under the totality of the circumstances, the predominant purpose of the contract is for the sale of goods or services. Marquette University v. Kuali, Inc., 584 F. Supp. 3d 720 (2022).

402.103 402.103 Definitions and index of definitions.

402.103(1) (1) In this chapter unless the context otherwise requires:

402.103(1)(a) (a) “Buyer” means a person who buys or contracts to buy goods.

402.103(1)(b) (b) “Good faith” in the case of a merchant means honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade.

402.103(1)(c) (c) “Receipt” of goods means taking physical possession of them.

402.103(1)(d) (d) “Seller” means a person who sells or contracts to sell goods.

402.103(2) (2) Other definitions applying to this chapter or to specified sections thereof, and the sections in which they appear are:

402.103(2)(a) (a) “Acceptance” — s. 402.606.

402.103(2)(b) (b) “Banker’s credit” — s. 402.325.

402.103(2)(c) (c) “Between merchants” — s. 402.104.

402.103(2)(d) (d) “Cancellation” — s. 402.106 (1).

402.103(2)(e) (e) “Commercial unit” — s. 402.105.

402.103(2)(f) (f) “Confirmed credit” — s. 402.325.

402.103(2)(g) (g) “Conforming to contract” — s. 402.106.

402.103(2)(h) (h) “Contract for sale” — s. 402.106.

402.103(2)(i) (i) “Cover” — s. 402.712.

402.103(2)(j) (j) “Entrusting” — s. 402.403.

402.103(2)(k) (k) “Financing agency” — s. 402.104.

402.103(2)(L) (L) “Future goods” — s. 402.105.

402.103(2)(m) (m) “Goods” — s. 402.105.

402.103(2)(n) (n) “Identification” — s. 402.501.

402.103(2)(o) (o) “Installment contract” — s. 402.612.

402.103(2)(p) (p) “Letter of credit” — s. 402.325.

402.103(2)(q) (q) “Lot” — s. 402.105.

402.103(2)(r) (r) “Merchant” — s. 402.104.

402.103(2)(s) (s) “Overseas” — s. 402.323.

402.103(2)(t) (t) “Person in position of seller” — s. 402.707.

402.103(2)(u) (u) “Present sale” — s. 402.106.

402.103(2)(v) (v) “Sale” — s. 402.106.

402.103(2)(w) (w) “Sale on approval” — s. 402.326.

402.103(2)(x) (x) “Sale or return” — s. 402.326.

402.103(2)(y) (y) “Termination” — s. 402.106.

402.103(3) (3) The following definitions in other chapters apply to this chapter:

402.103(3)(a) (a) “Check” — s. 403.104.

402.103(3)(b) (b) “Consignee” — s. 407.102.

402.103(3)(c) (c) “Consignor” — s. 407.102.

402.103(3)(d) (d) “Consumer goods” — s. 409.102.

402.103(3)(dm) (dm) “Control” — s. 407.106.

402.103(3)(e) (e) “Dishonor” — s. 403.502.

402.103(3)(f) (f) “Draft” — s. 403.104.

402.103(4) (4) In addition ch. 401 contains general definitions and principles of construction and interpretation applicable throughout this chapter.

402.103 History History: 1983 a. 189 s. 329 (24); 1995 a. 449; 2001 a. 10; 2009 a. 322.

402.104 402.104 Definitions: “merchant”; “between merchants”; “financing agency”.

402.104(1) (1) “Between merchants” means in any transaction with respect to which both parties are chargeable with the knowledge or skill of merchants.

402.104(2) (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).

402.104(3) (3) “Merchant” means a person who deals in goods of the kind or otherwise by his or her occupation holds himself or herself out as having knowledge or skill peculiar to the practices or goods involved in the transaction or to whom such knowledge or skill may be attributed by his or her employment of an agent or broker or other intermediary who by his or her occupation holds himself or herself out as having such knowledge or skill.

402.104 History History: 1983 a. 189; 1991 a. 316; 2009 a. 322.

402.104 Annotation Because the status of “merchant” under sub. (3) does not attach to the casual or inexperienced seller, whether a farmer is a merchant rests upon the individualized facts of the case. Harvest States Cooperatives v. Anderson, 217 Wis. 2d 154, 577 N.W.2d 381 (Ct. App. 1998), 97-2762.

402.104 Annotation A County As a Merchant Under the Uniform Commercial Code. Goldstein. 1980 WLR 194.

402.105 402.105 Definitions: transferability; “goods”; “future” goods; “lot”; “commercial unit”.

402.105(1) (1) 

402.105(1)(a) (a) “Commercial unit” means such a unit of goods as by commercial usage is a single whole for purposes of sale and division of which materially impairs its character or value on the market or in use. A commercial unit may be a single article (as a machine) or a set of articles (as a suite of furniture or an assortment of sizes) or a quantity (as a bale, gross, or carload) or any other unit treated in use or in the relevant market as a single whole.

402.105(1)(b) (b) Goods must be both existing and identified before any interest in them can pass. Goods which are not both existing and identified are “future” goods. A purported present sale of future goods or of any interest therein operates as a contract to sell.

402.105(1)(c) (c) “Goods” means all things (including specially manufactured goods) which are movable at the time of identification to the contract for sale other than the money in which the price is to be paid, investment securities (ch. 408) and things in action. “Goods” also includes the unborn young of animals and growing crops and other identified things attached to realty as described in s. 402.107 on goods to be severed from realty.

402.105(1)(d) (d) “Lot” means a parcel or a single article which is the subject matter of a separate sale or delivery, whether or not it is sufficient to perform the contract.

402.105(3) (3) There may be a sale of a part interest in existing identified goods.

402.105(4) (4) An undivided share in an identified bulk of fungible goods is sufficiently identified to be sold although the quantity of the bulk is not determined. Any agreed proportion of such a bulk or any quantity thereof agreed upon by number, weight or other measure may to the extent of the seller’s interest in the bulk be sold to the buyer who then becomes an owner in common.

402.105 History History: 1983 a. 189.

402.105 Annotation Given the authority establishing that even licensed software is a good, the contract in this case—under which the seller maintained its software on its own servers and the buyer paid an annual subscription fee to access the software through a web browser—was at least in part for the sale of a “good.” Marquette University v. Kuali, Inc., 584 F. Supp. 3d 720 (2022).

402.106 402.106 Definitions: “contract”; “agreement”; “contract for sale”; “sale”; “present sale”; “conforming” to contract; “termination”; “cancellation”. In this chapter unless the context otherwise requires:

402.106(1) (1) “Cancellation” occurs when either party puts an end to the contract for breach by the other and its effect is the same as that of “termination” except that the canceling party also retains any remedy for breach of the whole contract or any unperformed balance.

402.106(2) (2) Goods or conduct including any part of a performance are “conforming” or conform to the contract when they are in accordance with the obligations under the contract.

402.106(3) (3) “Contract” and “agreement” are limited to those relating to the present or future sale of goods.

402.106(4) (4) “Contract for sale” includes both a present sale of goods and a contract to sell goods at a future time.

402.106(5) (5) A “present sale” means a sale which is accomplished by the making of the contract.

402.106(6) (6) A “sale” consists in the passing of title from the seller to the buyer for a price (s. 402.401).

402.106(7) (7) “Termination” occurs when either party pursuant to a power created by agreement or law puts an end to the contract otherwise than for its breach. On “termination” all obligations which are still executory on both sides are discharged but any right based on prior breach or performance survives.

402.106 History History: 1983 a. 189.

402.107 402.107 Goods to be severed from realty: recording.

402.107(1) (1) A contract for the sale of minerals or the like (including oil and gas) or a structure or its materials to be removed from realty is a contract for the sale of goods within this chapter if they are to be severed by the seller but until severance a purported present sale thereof which is not effective as a transfer of an interest in land is effective only as a contract to sell.