Chapter 402

402.306(2) (2) A lawful agreement by either the seller or the buyer for exclusive dealing in the kind of goods concerned imposes unless otherwise agreed an obligation by the seller to use best efforts to supply the goods and by the buyer to use best efforts to promote their sale.

402.306 Annotation A “pay as used” proposal to purchase inventory was analogous to a “requirements contract.” Lambert Corp. v. Evans, 575 F.2d 132 (1978).

402.307 402.307 Delivery in single lot or several lots. Unless otherwise agreed all goods called for by a contract for sale must be tendered in a single delivery and payment is due only on such tender but where the circumstances give either party the right to make or demand delivery in lots the price if it can be apportioned may be demanded for each lot.

402.308 402.308 Absence of specified place for delivery. Unless otherwise agreed:

402.308(1) (1) The place for delivery of goods is the seller’s place of business or if the seller has none the seller’s residence; but

402.308(2) (2) In a contract for sale of identified goods which to the knowledge of the parties at the time of contracting are in some other place, that place is the place for their delivery; and

402.308(3) (3) Documents of title may be delivered through customary banking channels.

402.308 History History: 1991 a. 316.

402.309 402.309 Absence of specific time provisions; notice of termination.

402.309(1) (1) The time for shipment or delivery or any other action under a contract if not provided in this chapter or agreed upon shall be a reasonable time.

402.309(2) (2) Where the contract provides for successive performances but is indefinite in duration it is valid for a reasonable time but unless otherwise agreed may be terminated at any time by either party.

402.309(3) (3) Termination of a contract by one party except on the happening of an agreed event requires that reasonable notification be received by the other party and an agreement dispensing with notification is invalid if its operation would be unconscionable.

402.309 Annotation In this case, although the parties’ agreements showed that the defendant did not promise to meet a strict deadline, that didn’t mean that the defendant’s delays could not qualify as a material breach. Under sub. (1), even when no time for performance is identified in a sales agreement, a party must complete performance in a reasonable time. Oregon Potato Co. v. Kerry Inc., 575 F. Supp. 3d 1064 (2021).

402.310 402.310 Open time for payment or running of credit; authority to ship under reservation. Unless otherwise agreed:

402.310(1) (1) Payment is due at the time and place at which the buyer is to receive the goods even though the place of shipment is the place of delivery; and

402.310(2) (2) If the seller is authorized to send the goods the seller may ship them under reservation, and may tender the documents of title, but the buyer may inspect the goods after their arrival before payment is due unless such inspection is inconsistent with the terms of the contract (s. 402.513); and

402.310(3) (3) If delivery is authorized and made by way of documents of title otherwise than by sub. (2) then payment is due regardless of where the goods are to be received at the time and place at which the buyer is to receive the documents; or at the time the buyer is to receive delivery of the electronic documents and at the seller’s place of business or, if none, the seller’s residence; and

402.310(4) (4) Where the seller is required or authorized to ship the goods on credit the credit period runs from the time of shipment but postdating the invoice or delaying its dispatch will correspondingly delay the starting of the credit period.

402.310 History History: 1991 a. 316; 2009 a. 322.

402.311 402.311 Options and cooperation respecting performance.

402.311(1) (1) An agreement for sale which is otherwise sufficiently definite (s. 402.204 (3)) to be a contract is not made invalid by the fact that it leaves particulars of performance to be specified by one of the parties. Any such specification must be made in good faith and within limits set by commercial reasonableness.

402.311(2) (2) Unless otherwise agreed specifications relating to assortment of the goods are at the buyer’s option and except as otherwise provided in s. 402.319 (1) (c) and (3) specifications or arrangements relating to shipment are at the seller’s option.

402.311(3) (3) Where such specification would materially affect the other party’s performance but is not seasonably made or where one party’s cooperation is necessary to the agreed performance of the other but is not seasonably forthcoming, the other party in addition to all other remedies:

402.311(3)(a) (a) Is excused for any resulting delay in his or her own performance; and

402.311(3)(b) (b) May also either proceed to perform in any reasonable manner or after the time for a material part of his or her own performance treat the failure to specify or to cooperate as a breach by failure to deliver or accept the goods.

402.311 History History: 1991 a. 316.

402.312 402.312 Warranty of title and against infringements; buyer’s obligation against infringement.

402.312(1) (1) Subject to sub. (2) there is in a contract for sale a warranty by the seller that:

402.312(1)(a) (a) The title conveyed shall be good, and its transfer rightful; and

402.312(1)(b) (b) The goods shall be delivered free from any security interest or other lien or encumbrance of which the buyer at the time of contracting has no knowledge.

402.312(2) (2) A warranty under sub. (1) will be excluded or modified only by specific language or by circumstances which give the buyer reason to know that the person selling does not claim title in himself or herself or that the person selling is purporting to sell only such right or title as the person selling or a 3rd person may have.

402.312(3) (3) Unless otherwise agreed a seller who is a merchant regularly dealing in goods of the kind warrants that the goods shall be delivered free of the rightful claim of any 3rd person by way of infringement or the like but a buyer who furnishes specifications to the seller must hold the seller harmless against any such claim which arises out of compliance with the specifications.

402.312 History History: 1971 c. 40; 1991 a. 316; 2005 a. 253.

402.313 402.313 Express warranties by affirmation, promise, description, sample.

402.313(1) (1) Express warranties by the seller are created as follows:

402.313(1)(a) (a) Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise.

402.313(1)(b) (b) Any description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description.

402.313(1)(c) (c) Any sample or model which is made part of the basis of the bargain creates an express warranty that the whole of the goods shall conform to the sample or model.

402.313(2) (2) It is not necessary to the creation of an express warranty that the seller use formal words such as “warrant” or “guarantee” or that the seller 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 seller’s opinion or commendation of the goods does not create a warranty.

402.313 History History: 1991 a. 316.

402.313 Annotation Discussing express warranties. Ewers v. Eisenzopf, 88 Wis. 2d 482, 276 N.W.2d 802 (1979).

402.313 Annotation Nothing in this section exempts promises to repair and replace defective parts from the definition of express warranty. That makes sense because a promise to repair and replace does not change the character of a warranty but rather the remedy available to the consumer. Most motor vehicle warranties limit a buyer’s remedy to repair or replacement. Bryant v. BMW of North America LLC, 585 F. Supp. 3d 1178 (2022).

402.313 Annotation Strict Liability of the Bailor, Lessor and Licensor. Wiseman. 57 MLR 111 (1973).

402.314 402.314 Implied warranty: merchantability; usage of trade.

402.314(1) (1) Unless excluded or modified (s. 402.316), a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind. Under this section the serving for value of food or drink to be consumed either on the premises or elsewhere is a sale.

402.314(2) (2) Goods to be merchantable must be at least such as:

402.314(2)(a) (a) Pass without objection in the trade under the contract description; and

402.314(2)(b) (b) In the case of fungible goods, are of fair average quality within the description; and

402.314(2)(c) (c) Are fit for the ordinary purposes for which such goods are used; and

402.314(2)(d) (d) Run, within the variations permitted by the agreement, of even kind, quality and quantity within each unit and among all units involved; and

402.314(2)(e) (e) Are adequately contained, packaged, and labeled as the agreement may require; and

402.314(2)(f) (f) Conform to the promises or affirmations of fact made on the container or label if any.

402.314(3) (3) Unless excluded or modified (s. 402.316) other implied warranties may arise from course of dealing or usage of trade.

402.314 Annotation An unincorporated organization of band mothers who sold food at a fund-raising luncheon were not merchants as contemplated by sub. (1). Samson v. Riesing, 62 Wis. 2d 698, 215 N.W.2d 662 (1974).

402.314 Annotation Evidence that the goods break or physically deteriorate after delivery may be relevant to whether the goods were fit at the time of delivery for the ordinary purpose for which they are used, but consideration of that evidence for that purpose does not impose an express warranty for future performance. City of Stoughton v. Thomasson Lumber Co., 2004 WI App 6, 269 Wis. 2d 339, 675 N.W.2d 487, 02-2192.

402.314 Annotation A party may sue for breach of implied warranties under the Uniform Commercial Code although it does not take possession of the goods if it is the party who contracts to buy the goods. Estate of Kriefall v. Sizzler USA Franchise, Inc., 2011 WI App 101, 335 Wis. 2d 151, 801 N.W.2d 781, 09-1212.

402.314 Annotation When circumstances rendered a breach of good faith and of a fiduciary obligation chargeable to the buyer, the buyer was barred from asserting causes based on a breach of the warranty of merchantability, or on the seller’s claimed fault, to recover from the seller that portion of the claim disallowed, with the buyer’s consent, by the shipper. Greisler Brothers, Inc. v. Packerland Packing Co., 392 F. Supp. 206 (1975).

402.314 Annotation The Implied Warranty of Merchantability and the Remote Manufacturer. Anzivino. 101 MLR 505 (2017).

402.314 Annotation Status of Products Liability in Wisconsin. Coyne. WBB Aug. 1970.

402.315 402.315 Implied warranty: fitness for particular purpose. Where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller’s skill or judgment to select or furnish suitable goods, there is unless excluded or modified under s. 402.316 an implied warranty that the goods shall be fit for such purpose.

402.315 Annotation A party may sue for breach of implied warranties under the Uniform Commercial Code although it does not take possession of the goods if it is the party who contracts to buy the goods. Estate of Kriefall v. Sizzler USA Franchise, Inc., 2011 WI App 101, 335 Wis. 2d 151, 801 N.W.2d 781, 09-1212.

402.315 Annotation When expansion joints corroded soon after installation in a steam system, but the defendant manufacturer was unaware of the corrosive agent in the steam, this section did not allow recovery. Wisconsin Electric Power Co. v. Zallea Brothers, Inc., 606 F.2d 697 (1979).

402.316 402.316 Exclusion or modification of warranties.

402.316(1) (1) Words or conduct relevant to the creation of an express warranty and words or conduct tending to negate or limit warranty shall be construed wherever reasonable as consistent with each other; but subject to s. 402.202 on parol or extrinsic evidence, negation or limitation is inoperative to the extent that such construction is unreasonable.

402.316(2) (2) Subject to sub. (3), to exclude or modify the implied warranty of merchantability or any part of it the language must mention merchantability and in case of a writing must be conspicuous, and to exclude or modify any implied warranty of fitness the exclusion must be by a writing and conspicuous. Language to exclude all implied warranties of fitness is sufficient if it states, for example, that “There are no warranties which extend beyond the description on the face hereof.”

402.316(3) (3) Notwithstanding sub. (2), all of the following apply:

402.316(3)(a) (a) Unless the circumstances indicate otherwise, all implied warranties are excluded by expressions like “as is”, “with all faults” or other language which in common understanding calls the buyer’s attention to the exclusion of warranties and makes plain that there is no implied warranty.

402.316(3)(b) (b) When the buyer before entering into the contract has examined the goods or the sample or model as fully as the buyer desired or has refused to examine the goods there is no implied warranty with regard to defects which an examination ought in the circumstances to have revealed to the buyer.

402.316(3)(c) (c) Except as provided in s. 95.195, there is no implied warranty that cattle, hogs, sheep or horses are free from sickness or disease at the time a sale is consummated if all state and federal regulations pertaining to animal health are complied with by the seller, unless the seller knows at the time a sale is consummated that the cattle, hogs, sheep or horses were sick or diseased.

402.316(3)(d) (d) An implied warranty can be excluded or modified by course of dealing or course of performance or usage of trade.

402.316(4) (4) Remedies for breach of warranty can be limited in accordance with ss. 402.718 and 402.719 on liquidation or limitation of damages and on contractual modification of remedy.

402.316 History History: 1981 c. 128; 1989 a. 277.

402.316 Annotation A disclaimer of implied warranties under sub. (2) made after sale would be ineffective. Taterka v. Ford Motor Co., 86 Wis. 2d 140, 271 N.W.2d 653 (1978).

402.317 402.317 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 such construction is unreasonable the intention of the parties shall determine which warranty is dominant. In ascertaining that intention the following rules apply:

402.317(1) (1) Exact or technical specifications displace an inconsistent sample or model or general language of description.

402.317(2) (2) A sample from an existing bulk displaces inconsistent general language of description.

402.317(3) (3) Express warranties displace inconsistent implied warranties other than an implied warranty of fitness for a particular purpose.

402.318 402.318 Third-party beneficiaries of warranties, express or implied. A seller’s warranty whether express or implied extends to any natural person who is in the family or household of the seller’s buyer or who is a guest in that buyer’s home if it is reasonable to expect that such person may use, consume or be affected by the goods and who is injured in person by breach of the warranty. A seller may not exclude or limit the operation of this section.

402.318 History History: 1991 a. 316; 2007 a. 97.

402.318 Annotation Privity of contract is required in implied warranty cases, and the availability of punitive damages depends on the facts proved rather than the formal theory of recovery alleged. Drake v. Wham-O Manufacturing Co., 373 F. Supp. 608 (1974).

402.318 Annotation The Implied Warranty of Merchantability and the Remote Manufacturer. Anzivino. 101 MLR 505 (2017).

402.319 402.319 F.O.B. and F.A.S. terms.

402.319(1) (1) Unless otherwise agreed the term F.O.B. (which means “free on board”) at a named place, even though used only in connection with the stated price, is a delivery term under which:

402.319(1)(a) (a) When the term is F.O.B. the place of shipment, the seller must at that place ship the goods in the manner provided in s. 402.504 and bear the expense and risk of putting them into the possession of the carrier; or

402.319(1)(b) (b) When the term is F.O.B. the place of destination, the seller must at the seller’s expense and risk transport the goods to that place and there tender delivery of them in the manner provided in s. 402.503;

402.319(1)(c) (c) When under either par. (a) or (b) the term is also F.O.B. vessel, car or other vehicle, the seller must in addition at the seller’s expense and risk load the goods on board. If the term is F.O.B. vessel the buyer must name the vessel and in an appropriate case the seller must comply with s. 402.323 on the form of bill of lading.

402.319(2) (2) Unless otherwise agreed the term F.A.S. vessel (which means “free alongside”) at a named port, even though used only in connection with the stated price, is a delivery term under which the seller must:

402.319(2)(a) (a) At the seller’s expense and risk deliver the goods alongside the vessel in the manner usual in that port or on a dock designated and provided by the buyer; and

402.319(2)(b) (b) Obtain and tender a receipt for the goods in exchange for which the carrier is under a duty to issue a bill of lading.