Chapter 403

403.309 History History: 1995 a. 449.

403.310 403.310 Effect of instrument on obligation for which taken.

403.310(1) (1) Unless otherwise agreed, if a certified check, cashier’s check or teller’s check is taken for an obligation, the obligation is discharged to the same extent that discharge would result if an amount of money equal to the amount of the instrument were taken in payment of the obligation. Discharge of the obligation does not affect any liability that the obligor may have as an endorser of the instrument.

403.310(2) (2) Unless otherwise agreed and except as provided in sub. (1), if a note or an uncertified check is taken for an obligation, the obligation is suspended to the same extent that the obligation would be discharged if an amount of money equal to the amount of the instrument were taken, and the following rules apply:

403.310(2)(a) (a) In the case of an uncertified check, suspension of the obligation continues until dishonor of the check or until it is paid or certified. Payment or certification of the check results in discharge of the obligation to the extent of the amount of the check.

403.310(2)(b) (b) In the case of a note, suspension of the obligation continues until dishonor of the note or until it is paid. Payment of the note results in discharge of the obligation to the extent of the payment.

403.310(2)(c) (c) Except as provided in par. (d), if the check or note is dishonored and the obligee of the obligation for which the instrument was taken is the person entitled to enforce the instrument, the obligee may enforce either the instrument or the obligation. In the case of an instrument of a 3rd person which is negotiated to the obligee by the obligor, discharge of the obligor on the instrument also discharges the obligation.

403.310(2)(d) (d) If the person entitled to enforce the instrument taken for an obligation is a person other than the obligee, the obligee may not enforce the obligation to the extent that the obligation is suspended. If the obligee is the person entitled to enforce the instrument but no longer has possession of it because it was lost, stolen or destroyed, the obligation may not be enforced to the extent of the amount payable on the instrument, and to that extent the obligee’s rights against the obligor are limited to enforcement of the instrument.

403.310(3) (3) If an instrument other than one described in sub. (1) or (2) is taken for an obligation, the effect is one of the following:

403.310(3)(a) (a) That stated in sub. (1) if the instrument is one on which a bank is liable as maker or acceptor.

403.310(3)(b) (b) That stated in sub. (2) in any other case.

403.310 History History: 1995 a. 449.

403.311 403.311 Accord and satisfaction by use of instrument.

403.311(1) (1) Subsections (2) to (4) apply if a person against whom a claim is asserted proves that all of the following conditions have been met:

403.311(1)(a) (a) That person in good faith tendered an instrument to the claimant as full satisfaction of the claim.

403.311(1)(b) (b) The amount of the claim was unliquidated or subject to a bona fide dispute.

403.311(1)(c) (c) The claimant obtained payment of the instrument.

403.311(2) (2) Unless sub. (3) applies, the claim is discharged if the person against whom the claim is asserted proves that the instrument or an accompanying written communication contained a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim.

403.311(3) (3) Subject to sub. (4), a claim is not discharged under sub. (2) if any of the following applies:

403.311(3)(a) (a) The claimant, if an organization, proves that all of the following conditions have been met:

403.311(3)(a)1. 1. Within a reasonable time before the tender, the claimant sent a conspicuous statement to the person against whom the claim is asserted that communications concerning disputed debts, including an instrument tendered as full satisfaction of a debt, are to be sent to a designated person, office or place.

403.311(3)(a)2. 2. The instrument or accompanying communication was not received by that designated person, office or place.

403.311(3)(b) (b) The claimant, whether or not an organization, proves that within 90 days after payment of the instrument the claimant tendered repayment of the amount of the instrument to the person against whom the claim is asserted. This paragraph does not apply if the claimant is an organization that sent a statement complying with par. (a) 1.

403.311(4) (4) A claim is discharged if the person against whom the claim is asserted proves that within a reasonable time before collection of the instrument was initiated the claimant, or an agent of the claimant having direct responsibility with respect to the disputed obligation, knew that the instrument was tendered in full satisfaction of the claim.

403.311 History History: 1995 a. 449.

403.312 403.312 Lost, destroyed or stolen cashier’s check, teller’s check or certified check.

403.312(1) (1) In this section:

403.312(1)(a) (a) “Check” means a cashier’s check, teller’s check or certified check.

403.312(1)(b) (b) “Claimant” means a person who claims the right to receive the amount of a check that was lost, destroyed or stolen.

403.312(1)(c) (c) “Declaration of loss” means a written statement, made under penalty of perjury, to the effect that the declarer lost possession of a check, that the declarer is the drawer or payee of the check, in the case of a certified check, or the remitter or payee of the check, in the case of a cashier’s check or teller’s check, that the loss of possession was not the result of a transfer by the declarer or a lawful seizure, and that the declarer cannot reasonably obtain possession of the check because the check was destroyed, its whereabouts cannot be determined or it is in the wrongful possession of an unknown person or of a person that cannot be found or is not amenable to service of process.

403.312(1)(d) (d) “Obligated bank” means the issuer of a cashier’s check or teller’s check or the acceptor of a certified check.

403.312(2) (2) 

403.312(2)(a) (a) A claimant may assert a claim to the amount of a check by a communication to the obligated bank describing the check with reasonable certainty and requesting payment of the amount of the check if all of the following apply:

403.312(2)(a)1. 1. The claimant is the drawer or payee of a certified check or the remitter or payee of a cashier’s check or teller’s check.

403.312(2)(a)2. 2. The communication contains or is accompanied by a declaration of loss of the claimant with respect to the check.

403.312(2)(a)3. 3. The communication is received at a time and in a manner affording the obligated bank a reasonable time to act on it before the check is paid.

403.312(2)(a)4. 4. The claimant provides reasonable identification if requested by the obligated bank.

403.312(2)(b) (b) Delivery of a declaration of loss is a warranty of the truth of the statements made in the declaration of loss.

403.312(2)(c) (c) If a claim is asserted in compliance with this subsection, the following rules apply:

403.312(2)(c)1. 1. The claim becomes enforceable at the later of the time that the claim is asserted, or the 30th day following the date of the check, in the case of a cashier’s check or teller’s check, or the 30th day following the date of the acceptance, in the case of a certified check.

403.312(2)(c)2. 2. Until the claim becomes enforceable, it has no legal effect and the obligated bank may pay the check or, in the case of a teller’s check, may permit the drawee to pay the check. Payment to a person entitled to enforce the check discharges all liability of the obligated bank with respect to the check.

403.312(2)(c)3. 3. If the claim becomes enforceable before the check is presented for payment, the obligated bank is not obliged to pay the check.

403.312(2)(c)4. 4. When the claim becomes enforceable, the obligated bank becomes obliged to pay the amount of the check to the claimant if payment of the check has not been made to a person entitled to enforce the check. Subject to s. 404.302 (1) (a), payment to the claimant discharges all liability of the obligated bank with respect to the check.

403.312(3) (3) If the obligated bank pays the amount of a check to a claimant under sub. (2) (c) 4. and the check is presented for payment by a person having rights of a holder in due course, the claimant is obliged to refund the payment to the obligated bank if the check is paid or pay the amount of the check to the person having rights of a holder in due course if the check is dishonored.

403.312(4) (4) If a claimant has the right to assert a claim under sub. (2) and is also a person entitled to enforce a check which is lost, destroyed or stolen, the claimant may assert rights with respect to the check either under this section or s. 403.309.

403.312 History History: 1995 a. 449; 2019 a. 65.

subch. IV of ch. 403 SUBCHAPTER IV

LIABILITY OF PARTIES

403.401 403.401 Signature.

403.401(1) (1) A person is not liable on an instrument unless the person signed the instrument, or the person is represented by an agent or representative who signed the instrument and the signature is binding on the represented person under s. 403.402.

403.401(2) (2) A signature may be made manually or by means of a device or machine and may be made by the use of any name, including a trade or assumed name, or by a word, mark or symbol executed or adopted by a person with present intention to authenticate a writing.

403.401 History History: 1995 a. 449.

403.402 403.402 Signature by representative.

403.402(1) (1) If a person acting, or purporting to act, as a representative signs an instrument by signing either the name of the represented person or the name of the signer, the represented person is bound by the signature to the same extent that the represented person would be bound if the signature were on a simple contract. If the represented person is bound, the signature of the representative is the authorized signature of the represented person and the represented person is liable on the instrument, whether or not identified in the instrument.

403.402(2) (2) If a representative signs the name of the representative to an instrument and the signature is an authorized signature of the represented person, the following rules apply:

403.402(2)(a) (a) If the form of the signature shows unambiguously that the signature is made on behalf of the represented person who is identified in the instrument, the representative is not liable on the instrument.

403.402(2)(b) (b) Subject to sub. (3), if the form of the signature does not show unambiguously that the signature is made in a representative capacity or the represented person is not identified in the instrument, the representative is liable on the instrument to a holder in due course that took the instrument without notice that the representative was not intended to be liable on the instrument. With respect to any other person, the representative is liable on the instrument unless the representative proves that the original parties did not intend the representative to be liable on the instrument.

403.402(3) (3) If a representative signs the name of the representative as drawer of a check without indication of the representative status and the check is payable from an account of the represented person who is identified on the check, the signer is not liable on the check if the signature is an authorized signature of the represented person.

403.402 History History: 1995 a. 449.

403.402 Annotation Sub. (3) does not shield a representative signer from claims of fraud in signing a corporate check. However, reliance upon a bookkeeper’s signing of a check on the instruction of a superior that the corporation was solvent was not justifiable reliance that would sustain a claim of fraud. Korhumel Steel Corp. v. Wandler, 229 Wis. 2d 395, 600 N.W.2d 592 (Ct. App. 1999), 98-2042.

403.403 403.403 Unauthorized signature.

403.403(1) (1) Unless otherwise provided in this chapter or ch. 404, an unauthorized signature is ineffective except as the signature of the unauthorized signer in favor of a person who in good faith pays the instrument or takes it for value. An unauthorized signature may be ratified for all purposes of this chapter.

403.403(2) (2) If the signature of more than one person is required to constitute the authorized signature of an organization, the signature of the organization is unauthorized if one of the required signatures is lacking.

403.403(3) (3) The civil or criminal liability of a person who makes an unauthorized signature is not affected by any provision of this chapter which makes the unauthorized signature effective for the purposes of this chapter.

403.403 History History: 1995 a. 449.

403.404 403.404 Impostors; fictitious payees.

403.404(1) (1) If an impostor, by use of the mails or otherwise, induces the issuer of an instrument to issue the instrument to the impostor, or to a person acting in concert with the impostor, by impersonating the payee of the instrument or a person authorized to act for the payee, an endorsement of the instrument by any person in the name of the payee is effective as the endorsement of the payee in favor of a person who, in good faith, pays the instrument or takes it for value or for collection.

403.404(2) (2) If a person whose intent determines to whom an instrument is payable under s. 403.110 (1) or (2) does not intend the person identified as payee to have any interest in the instrument or if the person identified as payee of an instrument is a fictitious person, the following rules apply until the instrument is negotiated by special endorsement:

403.404(2)(a) (a) Any person in possession of the instrument is its holder.

403.404(2)(b) (b) An endorsement by any person in the name of the payee stated in the instrument is effective as the endorsement of the payee in favor of a person who, in good faith, pays the instrument or takes it for value or for collection.

403.404(3) (3) Under sub. (1) or (2), an endorsement is made in the name of a payee if it is made in a name substantially similar to that of the payee or if the instrument, whether or not endorsed, is deposited in a depositary bank to an account in a name substantially similar to that of the payee.

403.404(4) (4) With respect to an instrument to which sub. (1) or (2) applies, if a person paying the instrument or taking it for value or for collection fails to exercise ordinary care in paying or taking the instrument and that failure substantially contributes to loss resulting from payment of the instrument, the person bearing the loss may recover from the person failing to exercise ordinary care to the extent that the failure to exercise ordinary care contributed to the loss.

403.404 History History: 1995 a. 449.

403.405 403.405 Employer’s responsibility for fraudulent endorsement by employee.

403.405(1) (1) In this section:

403.405(1)(a) (a) “Employee” includes an independent contractor and employee of an independent contractor retained by the employer.

403.405(1)(b) (b) “Fraudulent endorsement” means, in the case of an instrument payable to the employer, a forged endorsement purporting to be that of the employer or, in the case of an instrument with respect to which the employer is the issuer, a forged endorsement purporting to be that of the person identified as payee.

403.405(1)(c) (c)

403.405(1)(c)1. 1. “Responsibility” with respect to instruments means authority to do any of the following:

403.405(1)(c)1.a. a. Sign or endorse instruments on behalf of the employer.

403.405(1)(c)1.b. b. Process instruments received by the employer for bookkeeping purposes, for deposit to an account or for other disposition.

403.405(1)(c)1.c. c. Prepare or process instruments for issue in the name of the employer.

403.405(1)(c)1.d. d. Supply information determining the names or addresses of payees of instruments to be issued in the name of the employer.

403.405(1)(c)1.e. e. Control the disposition of instruments to be issued in the name of the employer.

403.405(1)(c)1.f. f. Act otherwise in a responsible capacity with respect to instruments.

403.405(1)(c)2. 2. “Responsibility” does not include authority that merely allows an employee to have access to instruments or blank or incomplete instrument forms that are being stored or transported or are part of incoming or outgoing mail, or similar access.

403.405(2) (2) For the purpose of determining the rights and liabilities of a person who, in good faith, pays an instrument or takes it for value or for collection, if an employer entrusted an employee with responsibility with respect to the instrument and the employee or a person acting in concert with the employee makes a fraudulent endorsement of the instrument, the endorsement is effective as the endorsement of the person to whom the instrument is payable if it is made in the name of that person. If the person paying the instrument or taking it for value or for collection fails to exercise ordinary care in paying or taking the instrument and that failure substantially contributes to loss resulting from the fraud, the person bearing the loss may recover from the person failing to exercise ordinary care to the extent that the failure to exercise ordinary care contributed to the loss.

403.405(3) (3) Under sub. (2), an endorsement is made in the name of the person to whom an instrument is payable if the endorsement is made in a name substantially similar to the name of that person or if the instrument, whether or not endorsed, is deposited in a depositary bank to an account in a name substantially similar to the name of that person.

403.405 History History: 1995 a. 449.