Chapter 402

402.705(3)(d) (d) A carrier who has issued a nonnegotiable bill of lading is not obliged to obey a notification to stop received from a person other than the consignor.

402.705 History History: 1983 a. 500 s. 43; 1991 a. 316; 2009 a. 322.

402.706 402.706 Seller’s resale including contract for resale.

402.706(1) (1) Under the conditions stated in s. 402.703 on seller’s remedies, the seller may resell the goods concerned or the undelivered balance thereof. Where the resale is made in good faith and in a commercially reasonable manner the seller may recover the difference between the resale price and the contract price together with any incidental damages allowed under s. 402.710, but less expenses saved in consequence of the buyer’s breach.

402.706(2) (2) Except as otherwise provided in sub. (3) or unless otherwise agreed resale may be at public or private sale including sale by way of one or more contracts to sell or of identification to an existing contract of the seller. Sale may be as a unit or in parcels and at any time and place and on any terms but every aspect of the sale including the method, manner, time, place and terms must be commercially reasonable. The resale must be reasonably identified as referring to the broken contract, but it is not necessary that the goods be in existence or that any or all of them have been identified to the contract before the breach.

402.706(3) (3) Where the resale is at private sale the seller must give the buyer reasonable notification of the seller’s intention to resell.

402.706(4) (4) Where the resale is at public sale:

402.706(4)(a) (a) Only identified goods can be sold except where there is a recognized market for a public sale of futures in goods of the kind; and

402.706(4)(b) (b) It must be made at a usual place or market for public sale if one is reasonably available and except in the case of goods which are perishable or threaten to decline in value speedily the seller must give the buyer reasonable notice of the time and place of the resale; and

402.706(4)(c) (c) If the goods are not to be within the view of those attending the sale the notification of sale must state the place where the goods are located and provide for their reasonable inspection by prospective bidders; and

402.706(4)(d) (d) The seller may buy.

402.706(5) (5) A purchaser who buys in good faith at a resale takes the goods free of any rights of the original buyer even though the seller fails to comply with one or more of the requirements of this section.

402.706(6) (6) The seller is not accountable to the buyer for any profit made on any resale. A person in the position of a seller (s. 402.707) or a buyer who has rightfully rejected or justifiably revoked acceptance must account for any excess over the amount of that person’s security interest, as defined in s. 402.711 (3).

402.706 History History: 1991 a. 316.

402.707 402.707 “Person in the position of a seller”.

402.707(1) (1) A “person in the position of a seller” includes as against a principal an agent who has paid or become responsible for the price of goods on behalf of the agent’s principal or anyone who otherwise holds a security interest or other right in goods similar to that of a seller.

402.707(2) (2) A person in the position of a seller may as provided in this chapter withhold or stop delivery (s. 402.705) and resell (s. 402.706) and recover incidental damages (s. 402.710).

402.707 History History: 1991 a. 316.

402.708 402.708 Seller’s damages for nonacceptance or repudiation.

402.708(1) (1) Subject to sub. (2) and to s. 402.723 with respect to proof of market price the measure of damages for nonacceptance or repudiation by the buyer is the difference between the market price at the time and place for tender and the unpaid contract price together with any incidental damages provided in s. 402.710, but less expenses saved in consequence of the buyer’s breach.

402.708(2) (2) If the measure of damages provided in sub. (1) is inadequate to put the seller in as good a position as performance would have done then the measure of damages is the profit (including reasonable overhead) which the seller would have made from full performance by the buyer, together with any incidental damages provided in s. 402.710, due allowance for costs reasonably incurred and due credit for payments or proceeds of resale.

402.709 402.709 Action for the price.

402.709(1) (1) When the buyer fails to pay the price as it becomes due the seller may recover, together with any incidental damages under s. 402.710, the price:

402.709(1)(a) (a) Of goods accepted or of conforming goods lost or damaged within a commercially reasonable time after risk of their loss has passed to the buyer; and

402.709(1)(b) (b) Of goods identified to the contract if the seller is unable after reasonable effort to resell them at a reasonable price or the circumstances reasonably indicate that such effort will be unavailing.

402.709(2) (2) Where the seller sues for the price the seller must hold for the buyer any goods which have been identified to the contract and are still in the seller’s control except that if resale becomes possible the seller may resell them at any time prior to the collection of the judgment. The net proceeds of any such resale must be credited to the buyer and payment of the judgment entitles the buyer to any goods not resold.

402.709(3) (3) After the buyer has wrongfully rejected or revoked acceptance of the goods or has failed to make a payment due or has repudiated (s. 402.610), a seller who is held not entitled to the price under this section shall nevertheless be awarded damages for nonacceptance under s. 402.708.

402.709 History History: 1991 a. 316.

402.710 402.710 Seller’s incidental damages. Incidental damages to an aggrieved seller include any commercially reasonable charges, expenses or commissions incurred in stopping delivery, in the transportation, care and custody of goods after the buyer’s breach, in connection with return or resale of the goods or otherwise resulting from the breach.

402.711 402.711 Buyer’s remedies in general; buyer’s security interest in rejected goods.

402.711(1) (1) Where the seller fails to make delivery or repudiates or the buyer rightfully rejects or justifiably revokes acceptance then with respect to any goods involved, and with respect to the whole if the breach goes to the whole contract (s. 402.612), the buyer may cancel and whether or not the buyer has done so may in addition to recovering so much of the price as has been paid:

402.711(1)(a) (a) “Cover” and have damages under s. 402.712 as to all the goods affected whether or not they have been identified to the contract; or

402.711(1)(b) (b) Recover damages for nondelivery as provided in s. 402.713.

402.711(2) (2) Where the seller fails to deliver or repudiates the buyer may also:

402.711(2)(a) (a) If the goods have been identified recover them as provided in s. 402.502; or

402.711(2)(b) (b) In a proper case obtain specific performance or replevy the goods as provided in s. 402.716.

402.711(3) (3) On rightful rejection or justifiable revocation of acceptance a buyer has a security interest in goods in the buyer’s possession or control for any payments made on their price and any expenses reasonably incurred in their inspection, receipt, transportation, care and custody and may hold such goods and resell them in like manner as an aggrieved seller (s. 402.706).

402.711 History History: 1991 a. 316.

402.712 402.712 “Cover”; buyer’s procurement of substitute goods.

402.712(1) (1) After a breach within s. 402.711 the buyer may “cover” by making in good faith and without unreasonable delay any reasonable purchase of or contract to purchase goods in substitution for those due from the seller.

402.712(2) (2) The buyer may recover from the seller as damages the difference between the cost of cover and the contract price together with any incidental or consequential damages as defined in s. 402.715, but less expenses saved in consequence of the seller’s breach.

402.712(3) (3) Failure of the buyer to effect cover within this section does not bar the buyer from any other remedy.

402.712 History History: 1991 a. 316.

402.713 402.713 Buyer’s damages for nondelivery or repudiation.

402.713(1) (1) Subject to s. 402.723 with respect to proof of market price, the measure of damages for nondelivery or repudiation by the seller is the difference between the market price at the time when the buyer learned of the breach and the contract price together with any incidental and consequential damages provided in s. 402.715, but less expenses saved in consequence of the seller’s breach.

402.713(2) (2) Market price is to be determined as of the place for tender or, in cases of rejection after arrival or revocation of acceptance, as of the place of arrival.

402.714 402.714 Buyer’s damages for breach in regard to accepted goods.

402.714(1) (1) Where the buyer has accepted goods and given notification (s. 402.607 (3)) the buyer may recover as damages for any nonconformity of tender the loss resulting in the ordinary course of events from the seller’s breach as determined in any manner which is reasonable.

402.714(2) (2) The measure of damages for breach of warranty is the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted, unless special circumstances show proximate damages of a different amount.

402.714(3) (3) In a proper case any incidental and consequential damages under s. 402.715 may also be recovered.

402.714 History History: 1991 a. 316.

402.714 Annotation The economic loss doctrine, when it applies, bars recovery in tort for damages resulting from a product not performing as intended, including damages to the product itself or economic losses caused by the defective product. The economic loss doctrine does not bar the recovery of damages for injury to persons or other property resulting from a defective product; in fact s. 402.715 (2) (b) specifically allows it when caused by a breach of warranty. City of Stoughton v. Thomasson Lumber Co., 2004 WI App 6, 269 Wis. 2d 339, 675 N.W.2d 487, 02-2192.

402.714 Annotation The measure of damages when a buyer alleges that a product was defective and not worth what was paid for it at the time of acceptance is the difference between the warranted value of the product and its actual value at the time and place of acceptance. The “special circumstances” clause of sub. (2) does not completely bar a breach of warranty claim because the defective product was used for a period of time and later resold for more than its fair market value. However, the price of the defective product upon resale may be relevant as circumstantial evidence of the actual value of the product in its defective condition at the time and place of acceptance. Mayberry v. Volkswagen of America, Inc., 2005 WI 13, 278 Wis. 2d 39, 692 N.W.2d 226, 03-1621.

402.715 402.715 Buyer’s incidental and consequential damages.

402.715(1) (1) Incidental damages resulting from the seller’s breach include expenses reasonably incurred in inspection, receipt, transportation and care and custody of goods rightfully rejected, any commercially reasonable charges, expenses or commissions in connection with effecting cover and any other reasonable expense incident to the delay or other breach.

402.715(2) (2) Consequential damages resulting from the seller’s breach include:

402.715(2)(a) (a) Any loss resulting from general or particular requirements and needs of which the seller at the time of contracting had reason to know and which could not reasonably be prevented by cover or otherwise; and

402.715(2)(b) (b) Injury to person or property proximately resulting from any breach of warranty.

402.715 Annotation Litigation expenses are not recoverable under this section. Murray v. Holiday Rambler, Inc., 83 Wis. 2d 406, 265 N.W.2d 513 (1978).

402.715 Annotation Interest charges are proper incidental damages. A punitive damages award was upheld. Owens v. Meyer Sales Co., 129 Wis. 2d 491, 385 N.W.2d 234 (Ct. App. 1986).

402.715 Annotation The economic loss doctrine, when it applies, bars recovery in tort for damages resulting from a product not performing as intended, including damages to the product itself or economic losses caused by the defective product. The economic loss doctrine does not bar the recovery of damages for injury to persons or other property resulting from a defective product; in fact sub. (2) (b) specifically allows it when caused by a breach of warranty. City of Stoughton v. Thomasson Lumber Co., 2004 WI App 6, 269 Wis. 2d 339, 675 N.W.2d 487, 02-2192.

402.715 Annotation Discussing damages. Afram Export Corp. v. Metallurgiki Halyps, S.A., 772 F.2d 1358 (1985).

402.716 402.716 Buyer’s right to specific performance or replevin.

402.716(1) (1) Specific performance may be decreed where the goods are unique or in other proper circumstances.

402.716(2) (2) The decree for specific performance may include such terms and conditions as to payment of the price, damages or other relief as the court may deem just.

402.716(3) (3) The buyer has a right of replevin for goods identified to the contract if after reasonable effort the buyer is unable to effect cover for such goods or the circumstances reasonably indicate that such effort will be unavailing or if the goods have been shipped under reservation and satisfaction of the security interest in them has been made or tendered. In the case of goods bought for personal, family, or household purposes, the buyer’s right of replevin vests upon acquisition of a special property, even if the seller had not then repudiated or failed to deliver.

402.716 History History: 1991 a. 316; 2001 a. 10.

402.717 402.717 Deduction of damages from the price. The buyer on notifying the seller of the buyer’s intention to do so may deduct all or any part of the damages resulting from any breach of the contract from any part of the price still due under the same contract.

402.717 History History: 1991 a. 316.

402.718 402.718 Liquidation or limitation of damages; deposits.

402.718(1) (1) Damages for breach by either party may be liquidated in the agreement but only at an amount which is reasonable in the light of the anticipated or actual harm caused by the breach, the difficulties of proof of loss, and the inconvenience or nonfeasibility of otherwise obtaining an adequate remedy. A term fixing unreasonably large liquidated damages is void as a penalty.

402.718(2) (2) Where the seller justifiably withholds delivery of goods because of the buyer’s breach, the buyer is entitled to restitution of any amount by which the sum of the buyer’s payments exceeds:

402.718(2)(a) (a) The amount to which the seller is entitled by virtue of terms liquidating the seller’s damages in accordance with sub. (1); or

402.718(2)(b) (b) In the absence of such terms, 20 percent of the value of the total performance for which the buyer is obligated under the contract or $500, whichever is smaller.

402.718(3) (3) The buyer’s right to restitution under sub. (2) is subject to offset to the extent that the seller establishes:

402.718(3)(a) (a) A right to recover damages under this chapter other than sub. (1); and

402.718(3)(b) (b) The amount or value of any benefits received by the buyer directly or indirectly by reason of the contract.

402.718(4) (4) Where a seller has received payment in goods their reasonable value or the proceeds of their resale shall be treated as payments for the purpose of sub. (2); but if the seller has notice of the buyer’s breach before reselling goods received in part performance, the seller’s resale is subject to the conditions laid down in s. 402.706 on resale by an aggrieved seller.

402.718 History History: 1991 a. 316; 2009 a. 177.

402.718 Annotation The unreasonableness of liquidated damages is properly a matter of defense. The defendant could not raise the question of unreasonable liquidated damages by demurrer. Northwestern Motor Car, Inc. v. Pope, 51 Wis. 2d 292, 187 N.W.2d 200 (1971).

402.718 Annotation If a stipulated damages clause is valid, mitigation of damages is not applicable to determine damages. Wassenaar v. Panos, 111 Wis. 2d 518, 331 N.W.2d 357 (1983).

402.718 Annotation The test to determine whether a stipulated damages provision is enforceable is whether the clause is reasonable under the totality of the circumstances, and the party seeking to avoid enforcement bears the burden to show the clause is unreasonable. To determine reasonableness, a court considers the following factors: 1) whether the parties intended to provide for damages or for a penalty; 2) whether the injury caused by the breach would be difficult or incapable of accurate estimation at the time of entering into the contract; and 3) whether the stipulated damages are a reasonable forecast of the harm caused by the breach. Convenience Store Leasing & Management v. Annapurna Marketing, 2019 WI App 40, 388 Wis. 2d 353, 933 N.W.2d 110, 17-1505.

402.719 402.719 Contractual modification or limitation of remedy.

402.719(1) (1) Subject to subs. (2) and (3) and to s. 402.718 on liquidation and limitation of damages:

402.719(1)(a) (a) The agreement may provide for remedies in addition to or in substitution for those provided in this chapter and may limit or alter the measure of damages recoverable under this chapter, as by limiting the buyer’s remedies to return of the goods and repayment of the price or to repair and replacement of nonconforming goods or parts; and

402.719(1)(b) (b) Resort to a remedy as provided is optional unless the remedy is expressly agreed to be exclusive, in which case it is the sole remedy.

402.719(2) (2) Where circumstances cause an exclusive or limited remedy to fail of its essential purpose, remedy may be had as provided in chs. 401 to 411.

402.719(3) (3) Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable. Limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable but limitation of damages where the loss is commercial is not.

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