402.701402.701 Remedies for breach of collateral contracts not impaired. Remedies for breach of any obligation or promise collateral or ancillary to a contract for sale are not impaired by the provisions of this chapter.

402.702(1)(1) Where the seller discovers the buyer to be insolvent the seller may refuse delivery except for cash including payment for all goods theretofore delivered under the contract, and stop delivery under s. 402.705.

402.702(2)(2) Where the seller discovers that the buyer has received goods on credit while insolvent the seller may reclaim the goods upon demand made within 10 days after the receipt, but if misrepresentation of solvency has been made to the particular seller in writing within 3 months before delivery the 10-day limitation does not apply. Except as provided in this subsection the seller may not base a right to reclaim goods on the buyer’s fraudulent or innocent misrepresentation of solvency or of intent to pay.

402.702(3)(3) The seller’s right to reclaim under sub. (2) is subject to the rights of a buyer in ordinary course or other good faith purchaser under s. 402.403. Successful reclamation of goods excludes all other remedies with respect to them.

402.702 AnnotationA holder of a security interest in after-acquired collateral qualifies as a good faith purchaser under sub. (3). House of Stainless, Inc. v. Marshall & Ilsley Bank, 75 Wis. 2d 264, 249 N.W.2d 561 (1977).

402.702 AnnotationWhen a bank, as the transferee of the seller, did not rely on a balance sheet that misrepresented the buyer’s insolvency and had no knowledge of the facts prior to the sale or delivery, it could not exercise the seller’s right of reclamation. Shapiro v. Union Bank & Savings Co., 458 F.2d 938 (1972).

402.703402.703 Seller’s remedies in general. Where the buyer wrongfully rejects or revokes acceptance of goods or fails to make a payment due on or before delivery or repudiates with respect to a part or the whole, then with respect to any goods directly affected and, if the breach is of the whole contract (s. 402.612), then also with respect to the whole undelivered balance, the aggrieved seller may:

402.703(1)(1) Withhold delivery of such goods;

402.703(2)(2) Stop delivery by any bailee as provided in s. 402.705;

402.703(3)(3) Proceed under s. 402.704 respecting goods still unidentified to the contract;

402.703(4)(4) Resell and recover damages as provided in s. 402.706;

402.703(5)(5) Recover damages for nonacceptance (s. 402.708) or in a proper case the price (s. 402.709);

402.703(6)(6) Cancel.

402.704402.704 Seller’s right to identify goods to the contract notwithstanding breach or to salvage unfinished goods.

402.704(1)(1) An aggrieved seller under s. 402.703 may:

402.704(1)(a)(a) Identify to the contract conforming goods not already identified if at the time the aggrieved seller learned of the breach those goods are in the aggrieved seller’s possession or control;

402.704(1)(b)(b) Treat as the subject of resale goods which have demonstrably been intended for the particular contract even though those goods are unfinished.

402.704(2)(2) Where the goods are unfinished an aggrieved seller may in the exercise of reasonable commercial judgment for the purposes of avoiding loss and of effective realization either complete the manufacture and wholly identify the goods to the contract or cease manufacture and resell for scrap or salvage value or proceed in any other reasonable manner.

402.705(1)(1) The seller may stop delivery of goods in the possession of a carrier or other bailee when the seller discovers the buyer to be insolvent (s. 402.702) and may stop delivery of carload, truckload, planeload or larger shipments of express or freight when the buyer repudiates or fails to make a payment due before delivery or if for any other reason the seller has a right to withhold or reclaim the goods.

402.705(2)(2) As against such buyer the seller may stop delivery until:

402.705(2)(b)(b) Acknowledgment to the buyer by any bailee of the goods except a carrier that the bailee holds the goods for the buyer; or