Chapter 402

402.102 Annotation This chapter does not just apply to a sale as that term is defined in s. 402.106 (6), but to the more general aspect of commerce: “transactions in goods.” The reach of Uniform Commercial Code (UCC) article 2, adopted as this chapter, goes considerably beyond the confines of the type of transaction that the UCC itself defines to be a sale, namely, the passing of title from a party called the seller to one denominated a buyer for a price. Estate of Kriefall v. Sizzler USA Franchise, Inc., 2011 WI App 101, 335 Wis. 2d 151, 801 N.W.2d 781, 09-1212.

402.102 Annotation Wisconsin applies the “predominant purpose” test to determine whether a mixed contract is subject to the Uniform Commercial Code. The predominant purpose test relies on both quantitative and subjective factors, including the language of the contract, the nature of the business of the supplier, the intrinsic worth of the materials, the circumstances of the parties, and the primary objective they hoped to achieve by entering into the contract. Ultimately, the court must consider both objective and subjective factors to determine whether, under the totality of the circumstances, the predominant purpose of the contract is for the sale of goods or services. Marquette University v. Kuali, Inc., 584 F. Supp. 3d 720 (2022).

402.103 402.103 Definitions and index of definitions.

402.103(1) (1) In this chapter unless the context otherwise requires:

402.103(1)(a) (a) “Buyer” means a person who buys or contracts to buy goods.

402.103(1)(b) (b) “Good faith” in the case of a merchant means honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade.

402.103(1)(c) (c) “Receipt” of goods means taking physical possession of them.

402.103(1)(d) (d) “Seller” means a person who sells or contracts to sell goods.

402.103(2) (2) Other definitions applying to this chapter or to specified sections thereof, and the sections in which they appear are:

402.103(2)(a) (a) “Acceptance” — s. 402.606.

402.103(2)(b) (b) “Banker’s credit” — s. 402.325.

402.103(2)(c) (c) “Between merchants” — s. 402.104.

402.103(2)(d) (d) “Cancellation” — s. 402.106 (1).

402.103(2)(e) (e) “Commercial unit” — s. 402.105.

402.103(2)(f) (f) “Confirmed credit” — s. 402.325.

402.103(2)(g) (g) “Conforming to contract” — s. 402.106.

402.103(2)(h) (h) “Contract for sale” — s. 402.106.

402.103(2)(i) (i) “Cover” — s. 402.712.

402.103(2)(j) (j) “Entrusting” — s. 402.403.

402.103(2)(k) (k) “Financing agency” — s. 402.104.

402.103(2)(L) (L) “Future goods” — s. 402.105.

402.103(2)(m) (m) “Goods” — s. 402.105.

402.103(2)(n) (n) “Identification” — s. 402.501.

402.103(2)(o) (o) “Installment contract” — s. 402.612.

402.103(2)(p) (p) “Letter of credit” — s. 402.325.

402.103(2)(q) (q) “Lot” — s. 402.105.

402.103(2)(r) (r) “Merchant” — s. 402.104.

402.103(2)(s) (s) “Overseas” — s. 402.323.

402.103(2)(t) (t) “Person in position of seller” — s. 402.707.

402.103(2)(u) (u) “Present sale” — s. 402.106.

402.103(2)(v) (v) “Sale” — s. 402.106.

402.103(2)(w) (w) “Sale on approval” — s. 402.326.

402.103(2)(x) (x) “Sale or return” — s. 402.326.

402.103(2)(y) (y) “Termination” — s. 402.106.

402.103(3) (3) The following definitions in other chapters apply to this chapter:

402.103(3)(a) (a) “Check” — s. 403.104.

402.103(3)(b) (b) “Consignee” — s. 407.102.

402.103(3)(c) (c) “Consignor” — s. 407.102.

402.103(3)(d) (d) “Consumer goods” — s. 409.102.

402.103(3)(dm) (dm) “Control” — s. 407.106.

402.103(3)(e) (e) “Dishonor” — s. 403.502.

402.103(3)(f) (f) “Draft” — s. 403.104.

402.103(4) (4) In addition ch. 401 contains general definitions and principles of construction and interpretation applicable throughout this chapter.

402.103 History History: 1983 a. 189 s. 329 (24); 1995 a. 449; 2001 a. 10; 2009 a. 322.

402.104 402.104 Definitions: “merchant”; “between merchants”; “financing agency”.

402.104(1) (1) “Between merchants” means in any transaction with respect to which both parties are chargeable with the knowledge or skill of merchants.

402.104(2) (2) “Financing agency” means a bank, finance company or other person who in the ordinary course of business makes advances against goods or documents of title or who by arrangement with either the seller or the buyer intervenes in ordinary course to make or collect payment due or claimed under the contract for sale, as by purchasing or paying the seller’s draft or making advances against it or by merely taking it for collection whether or not documents of title accompany or are associated with the draft. “Financing agency” includes also a bank or other person who similarly intervenes between persons who are in the position of seller and buyer in respect to the goods (s. 402.707).

402.104(3) (3) “Merchant” means a person who deals in goods of the kind or otherwise by his or her occupation holds himself or herself out as having knowledge or skill peculiar to the practices or goods involved in the transaction or to whom such knowledge or skill may be attributed by his or her employment of an agent or broker or other intermediary who by his or her occupation holds himself or herself out as having such knowledge or skill.

402.104 History History: 1983 a. 189; 1991 a. 316; 2009 a. 322.

402.104 Annotation Because the status of “merchant” under sub. (3) does not attach to the casual or inexperienced seller, whether a farmer is a merchant rests upon the individualized facts of the case. Harvest States Cooperatives v. Anderson, 217 Wis. 2d 154, 577 N.W.2d 381 (Ct. App. 1998), 97-2762.

402.104 Annotation A County As a Merchant Under the Uniform Commercial Code. Goldstein. 1980 WLR 194.

402.105 402.105 Definitions: transferability; “goods”; “future” goods; “lot”; “commercial unit”.

402.105(1) (1) 

402.105(1)(a) (a) “Commercial unit” means such a unit of goods as by commercial usage is a single whole for purposes of sale and division of which materially impairs its character or value on the market or in use. A commercial unit may be a single article (as a machine) or a set of articles (as a suite of furniture or an assortment of sizes) or a quantity (as a bale, gross, or carload) or any other unit treated in use or in the relevant market as a single whole.

402.105(1)(b) (b) Goods must be both existing and identified before any interest in them can pass. Goods which are not both existing and identified are “future” goods. A purported present sale of future goods or of any interest therein operates as a contract to sell.

402.105(1)(c) (c) “Goods” means all things (including specially manufactured goods) which are movable at the time of identification to the contract for sale other than the money in which the price is to be paid, investment securities (ch. 408) and things in action. “Goods” also includes the unborn young of animals and growing crops and other identified things attached to realty as described in s. 402.107 on goods to be severed from realty.

402.105(1)(d) (d) “Lot” means a parcel or a single article which is the subject matter of a separate sale or delivery, whether or not it is sufficient to perform the contract.

402.105(3) (3) There may be a sale of a part interest in existing identified goods.

402.105(4) (4) An undivided share in an identified bulk of fungible goods is sufficiently identified to be sold although the quantity of the bulk is not determined. Any agreed proportion of such a bulk or any quantity thereof agreed upon by number, weight or other measure may to the extent of the seller’s interest in the bulk be sold to the buyer who then becomes an owner in common.

402.105 History History: 1983 a. 189.

402.105 Annotation Given the authority establishing that even licensed software is a good, the contract in this case—under which the seller maintained its software on its own servers and the buyer paid an annual subscription fee to access the software through a web browser—was at least in part for the sale of a “good.” Marquette University v. Kuali, Inc., 584 F. Supp. 3d 720 (2022).

402.106 402.106 Definitions: “contract”; “agreement”; “contract for sale”; “sale”; “present sale”; “conforming” to contract; “termination”; “cancellation”. In this chapter unless the context otherwise requires:

402.106(1) (1) “Cancellation” occurs when either party puts an end to the contract for breach by the other and its effect is the same as that of “termination” except that the canceling party also retains any remedy for breach of the whole contract or any unperformed balance.

402.106(2) (2) Goods or conduct including any part of a performance are “conforming” or conform to the contract when they are in accordance with the obligations under the contract.

402.106(3) (3) “Contract” and “agreement” are limited to those relating to the present or future sale of goods.

402.106(4) (4) “Contract for sale” includes both a present sale of goods and a contract to sell goods at a future time.

402.106(5) (5) A “present sale” means a sale which is accomplished by the making of the contract.

402.106(6) (6) A “sale” consists in the passing of title from the seller to the buyer for a price (s. 402.401).

402.106(7) (7) “Termination” occurs when either party pursuant to a power created by agreement or law puts an end to the contract otherwise than for its breach. On “termination” all obligations which are still executory on both sides are discharged but any right based on prior breach or performance survives.

402.106 History History: 1983 a. 189.

402.107 402.107 Goods to be severed from realty: recording.

402.107(1) (1) A contract for the sale of minerals or the like (including oil and gas) or a structure or its materials to be removed from realty is a contract for the sale of goods within this chapter if they are to be severed by the seller but until severance a purported present sale thereof which is not effective as a transfer of an interest in land is effective only as a contract to sell.

402.107(2) (2) A contract for the sale apart from the land of growing crops or other things attached to realty and capable of severance without material harm thereto but not described in sub. (1) or of timber to be cut is a contract for the sale of goods within this chapter whether the subject matter is to be severed by the buyer or by the seller even though it forms part of the realty at the time of contracting, and the parties can by identification effect a present sale before severance.

402.107(3) (3) The provisions of this section are subject to any 3rd-party rights provided by the law relating to realty records, and the contract for sale may be executed and recorded as a document transferring an interest in land and shall then constitute notice to 3rd parties of the buyer’s rights under the contract for sale.

402.107 History History: 1973 c. 215; 2005 a. 253.

subch. II of ch. 402 SUBCHAPTER II

FORM, FORMATION, AND READJUSTMENT
OF CONTRACT

402.201 402.201 Formal requirements; statute of frauds.

402.201(1) (1) Except as otherwise provided in this section a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by the party’s authorized agent or broker. A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this subsection beyond the quantity of goods shown in such writing.

402.201(2) (2) Between merchants if within a reasonable time a writing in confirmation of the contract and sufficient against the sender is received and the party receiving it has reason to know its contents, it satisfies the requirements of sub. (1) against such party unless written notice of objection to its contents is given within 10 days after it is received.

402.201(3) (3) A contract which does not satisfy the requirements of sub. (1) but which is valid in other respects is enforceable:

402.201(3)(a) (a) If the goods are to be specially manufactured for the buyer and are not suitable for sale to others in the ordinary course of the seller’s business and the seller, before notice of repudiation is received and under circumstances which reasonably indicate that the goods are for the buyer, has made either a substantial beginning of their manufacture or commitments for their procurement; or

402.201(3)(b) (b) If the party against whom enforcement is sought admits in that party’s pleading, testimony or otherwise in court that a contract for sale was made, but the contract is not enforceable under this paragraph beyond the quantity of goods admitted; or

402.201(3)(c) (c) With respect to goods for which payment has been made and accepted or which have been received and accepted (s. 402.606).

402.201 History History: 1991 a. 316.

402.201 Annotation Receipt and acceptance of goods consistent with an oral contract is part performance sufficient to take the oral contract out of the statute of frauds even though the conduct is not inconsistent with some other dealings arguably had between the parties. Gerner v. Vasby, 75 Wis. 2d 660, 250 N.W.2d 319 (1977).

402.201 Annotation The statute of frauds was not satisfied when the only indication of a purchase contract between the parties was the unexplained notation “purchase price” in a document prepared by one party in response to the other’s request for an appraisal. First Bank v. H.K.A. Enterprises, Inc., 183 Wis. 2d 418, 515 N.W.2d 343 (Ct. App. 1994).

402.201 Annotation Not every contract for the sale of goods over $500, nor every modification thereof, strictly complies with the requirements of the statute of frauds, and it would be unreasonable to declare categorically all such contracts unenforceable. The Uniform Commercial Code and Wisconsin case law recognize exceptions to the statute of frauds, including waiver and performance. An attempt at modification contemplates a completed oral modification of a written contract that prohibits oral modification. The inquiry into whether there has been an attempt at modification sufficient to operate as a waiver of the statute of frauds is closely related to the inquiry to determine whether there was a valid oral modification. Royster-Clark, Inc. v. Olsen’s Mill, Inc., 2006 WI 46, 290 Wis. 2d 264, 714 N.W.2d 530, 03-1534.

402.201 Annotation When a letter confirmed an oral agreement under sub. (2), subject to completion of formal memorializing documents, the bargain was enforceable even though the document was not executed. Lambert Corp. v. Evans, 575 F.2d 132 (1978).