Chapter 403

403.102(3) (3) Regulations of the board of governors of the federal reserve system and operating circulars of the federal reserve banks supersede any inconsistent provision of this chapter to the extent of the inconsistency.

403.102 History History: 1995 a. 449.

403.103 403.103 Definitions.

403.103(1) (1) In this chapter:

403.103(1)(a) (a) “Acceptor” means a drawee who has accepted a draft.

403.103(1)(b) (b) “Drawee” means a person ordered in a draft to make payment.

403.103(1)(c) (c) “Drawer” means a person who signs or is identified in a draft as a person ordering payment.

403.103(1)(d) (d) “Good faith” means honesty in fact and the observance of reasonable commercial standards of fair dealing.

403.103(1)(e) (e) “Maker” means a person who signs or is identified in a note as a person undertaking to pay.

403.103(1)(f) (f) “Order” means a written instruction to pay money signed by the person giving the instruction. The instruction may be addressed to any person, including the person giving the instruction, or to one or more persons jointly or in the alternative but not in succession. An authorization to pay is not an order unless the person authorized to pay is also instructed to pay.

403.103(1)(g) (g) “Ordinary care” in the case of a person engaged in business means observance of reasonable commercial standards, prevailing in the area in which the person is located, with respect to the business in which the person is engaged. In the case of a bank that takes an instrument for processing for collection or payment by automated means, reasonable commercial standards do not require the bank to examine the instrument if the failure to examine does not violate the bank’s prescribed procedures and the bank’s procedures do not vary unreasonably from general banking usage not disapproved by this chapter or ch. 404.

403.103(1)(h) (h) “Party” means a party to an instrument.

403.103(1)(i) (i) “Promise” means a written undertaking to pay money signed by the person undertaking to pay. An acknowledgment of an obligation by the obligor is not a promise unless the obligor also undertakes to pay the obligation.

403.103(1)(j) (j) “Prove” with respect to a fact means to meet the burden of establishing a fact, as defined in s. 401.201 (2) (e).

403.103(1)(k) (k) “Remitter” means a person who purchases an instrument from its issuer if the instrument is payable to an identified person other than the purchaser.

403.103(2) (2) Other definitions applying to this chapter and the sections in which they appear are:

403.103(2)(ae) (ae) “Acceptance” — s. 403.409 (1).

403.103(2)(am) (am) “Accommodated party” — s. 403.419 (1).

403.103(2)(as) (as) “Accommodation party” — s. 403.419 (1).

403.103(2)(b) (b) “Alteration” — s. 403.407 (1).

403.103(2)(c) (c) “Anomalous endorsement” — s. 403.205 (4).

403.103(2)(d) (d) “Blank endorsement” — s. 403.205 (2).

403.103(2)(e) (e) “Cashier’s check” — s. 403.104 (7).

403.103(2)(fg) (fg) “Certificate of deposit” — s. 403.104 (10).

403.103(2)(fr) (fr) “Certified check” — s. 403.409 (4).

403.103(2)(g) (g) “Check” — s. 403.104 (6).

403.103(2)(h) (h) “Consideration” — s. 403.303 (2).

403.103(2)(hr) (hr) “Demand draft” — s. 403.104 (11).

403.103(2)(i) (i) “Draft” — s. 403.104 (5).

403.103(2)(jg) (jg) “Endorsement” — s. 403.204 (1).

403.103(2)(jr) (jr) “Endorser” — s. 403.204 (2).

403.103(2)(k) (k) “Holder in due course” — s. 403.302 (1).

403.103(2)(L) (L) “Incomplete instrument” — s. 403.115 (1).

403.103(2)(m) (m) “Instrument” — s. 403.104 (2).

403.103(2)(ng) (ng) “Issue” — s. 403.105 (1).

403.103(2)(nr) (nr) “Issuer” — s. 403.105 (3).

403.103(2)(og) (og) “Negotiable instrument” — s. 403.104 (1).

403.103(2)(or) (or) “Negotiation” — s. 403.201 (1).

403.103(2)(p) (p) “Note” — s. 403.104 (5).

403.103(2)(qd) (qd) “Payable at a definite time” — s. 403.108 (2).

403.103(2)(qh) (qh) “Payable on demand” — s. 403.108 (1).

403.103(2)(qp) (qp) “Payable to bearer” — s. 403.109 (1).

403.103(2)(qt) (qt) “Payable to order” — s. 403.109 (2).

403.103(2)(r) (r) “Payment” — s. 403.602 (1).

403.103(2)(s) (s) “Person entitled to enforce” — s. 403.301.

403.103(2)(t) (t) “Presentment” — s. 403.501 (1).

403.103(2)(u) (u) “Reacquisition” — s. 403.207.

403.103(2)(v) (v) “Special endorsement” — s. 403.205 (1).

403.103(2)(w) (w) “Teller’s check” — s. 403.104 (8).

403.103(2)(xg) (xg) “Transfer of instrument” — s. 403.203 (1).

403.103(2)(xr) (xr) “Traveler’s check” — s. 403.104 (9).

403.103(2)(y) (y) “Value” — s. 403.303 (1).

403.103(3) (3) The following definitions in other chapters apply to this chapter:

403.103(3)(a) (a) “Bank” — s. 404.105 (1).

403.103(3)(b) (b) “Banking day” — s. 404.104 (1) (c).

403.103(3)(c) (c) “Clearinghouse” — s. 404.104 (1) (d).

403.103(3)(d) (d) “Collecting bank” — s. 404.105 (2).

403.103(3)(e) (e) “Depositary bank” — s. 404.105 (3).

403.103(3)(f) (f) “Documentary draft” — s. 404.104 (1) (f).

403.103(3)(g) (g) “Intermediary bank” — s. 404.105 (4).

403.103(3)(h) (h) “Item” — s. 404.104 (1) (i).

403.103(3)(i) (i) “Payer bank” — s. 404.105 (5).

403.103(3)(j) (j) “Suspends payments” — s. 404.104 (1) (L).

403.103(4) (4) In addition, ch. 401 contains general definitions and principles of construction and interpretation applicable throughout this chapter.

403.103 History History: 1995 a. 449; 2003 a. 86; 2009 a. 320.

403.104 403.104 Negotiable instrument.

403.104(1) (1) Except as provided in subs. (3) and (4), “negotiable instrument” means an unconditional promise or order to pay a fixed amount of money, with or without interest or other charges described in the promise or order, if all of the following apply:

403.104(1)(a) (a) It is payable to bearer or to order at the time that it is issued or first comes into possession of a holder.

403.104(1)(b) (b) It is payable on demand or at a definite time.

403.104(1)(c) (c) It does not state any other undertaking or instruction by the person promising or ordering payment to do any act in addition to the payment of money, but the promise or order may contain any of the following:

403.104(1)(c)1. 1. An undertaking or power to give, maintain or protect collateral to secure payment.

403.104(1)(c)2. 2. An authorization or power to the holder to confess judgment or realize on or dispose of collateral.

403.104(1)(c)3. 3. A waiver of the benefit of any law intended for the advantage or protection of an obligor.

403.104(2) (2) “Instrument” means a negotiable instrument.

403.104(3) (3) An order that meets all of the requirements of sub. (1), except sub. (1) (a), and otherwise falls within the definition of check in sub. (6) is a negotiable instrument and a check.

403.104(4) (4) A promise or order other than a check is not an instrument if, at the time that it is issued or first comes into possession of a holder, it contains a conspicuous statement, however expressed, to the effect that the promise or order is not negotiable or is not an instrument governed by this chapter.

403.104(5) (5) An instrument is a note if it is a promise and is a draft if it is an order. If an instrument falls within the definition of both note and draft, a person entitled to enforce the instrument may treat it as either.

403.104(6) (6) “Check” means a draft, other than a documentary draft, payable on demand and drawn on a bank or means a cashier’s check, teller’s check, or demand draft. An instrument may be a check even though it is described on its face by another term, such as money order.

403.104(7) (7) “Cashier’s check” means a draft with respect to which the drawer and drawee are the same bank or branches of the same bank.

403.104(8) (8) “Teller’s check” means a draft drawn by a bank on another bank, or payable at or through a bank.

403.104(9) (9) “Traveler’s check” means an instrument that is payable on demand, that is drawn on or payable at or through a bank, that is designated by the term “traveler’s check” or by a substantially similar term, and that requires, as a condition to payment, a countersignature by a person whose specimen signature appears on the instrument.

403.104(10) (10) “Certificate of deposit” means an instrument containing an acknowledgment by a bank that a sum of money has been received by the bank and a promise by the bank to repay the sum of money. A certificate of deposit is a note of the bank.

403.104(11) (11) 

403.104(11)(a) (a) Except as provided under par. (b), “demand draft” means a writing that is not signed by a customer, as defined in s. 404.104 (1) (e), that is created by a 3rd party under the purported authority of the customer for the purpose of charging the customer’s account with a bank, that contains the account number of that account, and that contains at least one of the following:

403.104(11)(a)1. 1. The customer’s name.

403.104(11)(a)2. 2. A notation that the customer authorized the demand draft.

403.104(11)(a)3. 3. The statement “No signature required,” “Authorization on file,” or “Signature on file,” or words to that effect.

403.104(11)(b) (b) “Demand draft” does not include a check drawn by a fiduciary, as defined in s. 403.307 (1) (a).

403.104 History History: 1995 a. 449; 2003 a. 86.