Chapter 402

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.

402.107(2) (2) A contract for the sale apart from the land of growing crops or other things attached to realty and capable of severance without material harm thereto but not described in sub. (1) or of timber to be cut is a contract for the sale of goods within this chapter whether the subject matter is to be severed by the buyer or by the seller even though it forms part of the realty at the time of contracting, and the parties can by identification effect a present sale before severance.

402.107(3) (3) The provisions of this section are subject to any 3rd-party rights provided by the law relating to realty records, and the contract for sale may be executed and recorded as a document transferring an interest in land and shall then constitute notice to 3rd parties of the buyer’s rights under the contract for sale.

402.107 History History: 1973 c. 215; 2005 a. 253.

subch. II of ch. 402 SUBCHAPTER II

FORM, FORMATION, AND READJUSTMENT
OF CONTRACT

402.201 402.201 Formal requirements; statute of frauds.

402.201(1) (1) Except as otherwise provided in this section a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by the party’s authorized agent or broker. A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this subsection beyond the quantity of goods shown in such writing.

402.201(2) (2) Between merchants if within a reasonable time a writing in confirmation of the contract and sufficient against the sender is received and the party receiving it has reason to know its contents, it satisfies the requirements of sub. (1) against such party unless written notice of objection to its contents is given within 10 days after it is received.

402.201(3) (3) A contract which does not satisfy the requirements of sub. (1) but which is valid in other respects is enforceable:

402.201(3)(a) (a) If the goods are to be specially manufactured for the buyer and are not suitable for sale to others in the ordinary course of the seller’s business and the seller, before notice of repudiation is received and under circumstances which reasonably indicate that the goods are for the buyer, has made either a substantial beginning of their manufacture or commitments for their procurement; or

402.201(3)(b) (b) If the party against whom enforcement is sought admits in that party’s pleading, testimony or otherwise in court that a contract for sale was made, but the contract is not enforceable under this paragraph beyond the quantity of goods admitted; or

402.201(3)(c) (c) With respect to goods for which payment has been made and accepted or which have been received and accepted (s. 402.606).

402.201 History History: 1991 a. 316.

402.201 Annotation Receipt and acceptance of goods consistent with an oral contract is part performance sufficient to take the oral contract out of the statute of frauds even though the conduct is not inconsistent with some other dealings arguably had between the parties. Gerner v. Vasby, 75 Wis. 2d 660, 250 N.W.2d 319 (1977).

402.201 Annotation The statute of frauds was not satisfied when the only indication of a purchase contract between the parties was the unexplained notation “purchase price” in a document prepared by one party in response to the other’s request for an appraisal. First Bank v. H.K.A. Enterprises, Inc., 183 Wis. 2d 418, 515 N.W.2d 343 (Ct. App. 1994).

402.201 Annotation Not every contract for the sale of goods over $500, nor every modification thereof, strictly complies with the requirements of the statute of frauds, and it would be unreasonable to declare categorically all such contracts unenforceable. The Uniform Commercial Code and Wisconsin case law recognize exceptions to the statute of frauds, including waiver and performance. An attempt at modification contemplates a completed oral modification of a written contract that prohibits oral modification. The inquiry into whether there has been an attempt at modification sufficient to operate as a waiver of the statute of frauds is closely related to the inquiry to determine whether there was a valid oral modification. Royster-Clark, Inc. v. Olsen’s Mill, Inc., 2006 WI 46, 290 Wis. 2d 264, 714 N.W.2d 530, 03-1534.

402.201 Annotation When a letter confirmed an oral agreement under sub. (2), subject to completion of formal memorializing documents, the bargain was enforceable even though the document was not executed. Lambert Corp. v. Evans, 575 F.2d 132 (1978).

402.201 Annotation The statute of frauds is not applicable in an action based on promissory estoppel. Janke Construction Co. v. Vulcan Materials Co., 386 F. Supp. 687 (1974).

402.201 Annotation The Statute of Frauds of the Uniform Commercial Code and the Doctrine of Estoppel. Edwards. 62 MLR 205 (1978).

402.202 402.202 Final written expression: parol or extrinsic evidence. Terms with respect to which the confirmatory memoranda of the parties agree or which are otherwise set forth in a writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement but may be explained or supplemented:

402.202(1) (1) By course of dealing or usage of trade (s. 401.303) or by course of performance (s. 402.208);

402.202(2) (2) By evidence of consistent additional terms unless the court finds the writing to have been intended also as a complete and exclusive statement of the terms of the agreement.

402.202 History History: 2009 a. 320.

402.203 402.203 Seals inoperative. The affixing of a seal to a writing evidencing a contract for sale or an offer to buy or sell goods does not constitute the writing a sealed instrument and the law with respect to sealed instruments does not apply to such a contract or offer.

402.204 402.204 Formation in general.

402.204(1) (1) A contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract.

402.204(2) (2) An agreement sufficient to constitute a contract for sale may be found even though the moment of its making is undetermined.

402.204(3) (3) Even though one or more terms are left open a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy.

402.204 Annotation Even if the parties’ writings do not constitute a contract, a contract may be found through the parties’ conduct. Associated Milk Producers, Inc. v. Meadow Gold Dairies, Inc., 27 F.3d 268 (1994).

402.204 Annotation Shrinkwrap license agreements contained in computer software packages are enforceable unless their terms are objectionable on general contract grounds. ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 (1996).

402.204 Annotation Offer and acceptance are defined more liberally under the Uniform Commercial Code than under Wisconsin common law. C.G. Schmidt, Inc. v. Permasteelisa North America, 825 F.3d 801 (2016).

402.204 Annotation Contract Formulation Under Article 2 of the Uniform Commercial Code. Edwards. 61 MLR 215 (1977).

402.205 402.205 Firm offers. An offer by a merchant to buy or sell goods in a signed writing which by its terms gives assurance that it will be held open is not revocable, for lack of consideration, during the time stated or if no time is stated for a reasonable time, but in no event may such period of irrevocability exceed 3 months; but any such term of assurance on a form supplied by the offeree must be separately signed by the offeror.

402.205 Annotation Although a bid for pipe did not meet the “firm offer” requirement, the facts pleaded and relied upon by the contractor to support its claim and to which the supplier responded in entering its defense gave rise to the doctrine of promissory estoppel. Janke Construction Co. v. Vulcan Materials Co., 386 F. Supp. 687 (1974).

402.206 402.206 Offer and acceptance in formation of contract.

402.206(1) (1) Unless otherwise unambiguously indicated by the language or circumstances:

402.206(1)(a) (a) An offer to make a contract shall be construed as inviting acceptance in any manner and by any medium reasonable in the circumstances;

402.206(1)(b) (b) An order or other offer to buy goods for prompt or current shipment shall be construed as inviting acceptance either by a prompt promise to ship or by the prompt or current shipment of conforming or nonconforming goods, but such a shipment of nonconforming goods does not constitute an acceptance if the seller seasonably notifies the buyer that the shipment is offered only as an accommodation to the buyer.

402.206(2) (2) Where the beginning of a requested performance is a reasonable mode of acceptance an offeror who is not notified of acceptance within a reasonable time may treat the offer as having lapsed before acceptance.

402.206 Annotation Offer and acceptance are defined more liberally under the Uniform Commercial Code than under Wisconsin common law. C.G. Schmidt, Inc. v. Permasteelisa North America, 825 F.3d 801 (2016).

402.207 402.207 Additional terms in acceptance or confirmation.

402.207(1) (1) A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.

402.207(2) (2) The additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless:

402.207(2)(a) (a) The offer expressly limits acceptance to the terms of the offer;

402.207(2)(b) (b) They materially alter it; or

402.207(2)(c) (c) Notification of objection to them has already been given or is given within a reasonable time after notice of them is received.

402.207(3) (3) Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of chs. 401 to 411.

402.207 History History: 1979 c. 89; 1991 a. 148, 304, 315.

402.207 Annotation A seller’s “acknowledgment of order” that purports to deny liability for damages for defects becomes part of the contract only if it is assented to by the buyer. Air Products & Chemicals, Inc. v. Fairbanks Morse, Inc., 58 Wis. 2d 193, 206 N.W.2d 414 (1973).

402.207 Annotation When an offer to purchase contained the term “FOB, our truck, your plant, loaded,” the offeree’s response stated “as is, where is,” and the parties had no prior oral agreement, there was no valid contract, and the court could not reach the issue of whether additional or different terms in response to an offer destroyed an agreement between parties. Koehring Co. v. Glowacki, 77 Wis. 2d 497, 253 N.W.2d 64 (1977).

402.207 Annotation By signing an order form that provided that the buyer of a machine would indemnify and hold the seller harmless, the buyer expressly agreed to the provisions, whether or not there was a previously existing contract and whether or not the buyer read the order form before signing. Deminsky v. Arlington Plastics Machinery, 2001 WI App 287, 249 Wis. 2d 441, 638 N.W.2d 331, 01-0242.

402.207 Annotation Affirmed on other grounds. 2003 WI 15, 259 Wis. 2d 587, 657 N.W.2d 411, 01-0242.

402.207 Annotation An invoice is a written confirmation of a request for work by one party, the performance of work by the second, and the cost of the work agreed upon. While interest may not have been discussed originally, adding it to the bottom of the invoice constitutes the addition of a term not previously discussed between the parties, making the interest an additional part of the agreement unless one of the exceptions in sub. (2) applies. This section eliminates the traditional “meeting of the minds” requirement. Mid-State Contracting, Inc. v. Superior Floor Co., 2002 WI App 257, 258 Wis. 2d 139, 655 N.W.2d 142, 02-0761.

402.207 Annotation The question under sub. (2) (c) was not whether the defendant acquiesced to interest added to the bottom of invoices without inclusion in a contract, but whether the defendant objected to stop it. Mid-State Contracting, Inc. v. Superior Floor Co., 2002 WI App 257, 258 Wis. 2d 139, 655 N.W.2d 142, 02-0761.

402.207 Annotation This section recognizes that, in practice, parties’ forms may not be identical, a party might later add divergent terms, and the parties may not always read each other’s forms. This section allows for enforcement of the parties’ agreement, including the added terms. An invoice falls within the ambit of this section. It is a written confirmation of a request for work by one party, the performance of work by the second, and the cost of the work agreed upon. If purchase orders and order confirmations were immovable bookends to a contract, ensuing transactions between the parties would be composed of a cumbersome, inefficient series of mini-contracts. That is what this section seeks to avoid. Converting/Biophile Laboratories, Inc. v. Ludlow Composites Corp., 2006 WI App 187, 296 Wis. 2d 273, 722 N.W.2d 633, 05-1628.