Chapter 403

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.

403.105 403.105 Issue of instrument.

403.105(1) (1) “Issue” means the first delivery of an instrument by the maker or drawer, whether to a holder or nonholder, for the purpose of giving rights on the instrument to any person.

403.105(2) (2) An unissued instrument, or an unissued incomplete instrument that is completed, is binding on the maker or drawer, but nonissuance is a defense. An instrument that is conditionally issued or is issued for a special purpose is binding on the maker or drawer, but failure of the condition or special purpose to be fulfilled is a defense.

403.105(3) (3) “Issuer” applies to issued and unissued instruments and means a maker or drawer of an instrument.

403.105 History History: 1995 a. 449.

403.106 403.106 Unconditional promise or order.

403.106(1) (1) 

403.106(1)(a) (a) Except as otherwise provided in this section, for the purposes of s. 403.104 (1), a promise or order is unconditional unless it states any of the following:

403.106(1)(a)1. 1. An express condition to payment.

403.106(1)(a)2. 2. That the promise or order is subject to or governed by another writing.

403.106(1)(a)3. 3. That rights or obligations with respect to the promise or order are stated in another writing.

403.106(1)(b) (b) A reference to another writing does not of itself make the promise or order conditional.

403.106(2) (2) A promise or order is not made conditional by a reference to another writing for a statement of rights with respect to collateral, prepayment or acceleration or because payment is limited to resort to a particular fund or source.

403.106(3) (3) If a promise or order requires, as a condition to payment, a countersignature by a person whose specimen signature appears on the promise or order, the condition does not make the promise or order conditional for the purposes of s. 403.104 (1). If the person whose specimen signature appears on an instrument fails to countersign the instrument, the failure to countersign is a defense to the obligation of the issuer, but the failure does not prevent a transferee of the instrument from becoming a holder of the instrument.

403.106(4) (4) If a promise or order at the time that it is issued or first comes into possession of a holder contains a statement, required by applicable statutory or administrative law, to the effect that the rights of a holder or transferee are subject to claims or defenses that the issuer could assert against the original payee, the promise or order is not thereby made conditional for the purposes of s. 403.104 (1); but if the promise or order is an instrument, there cannot be a holder in due course of the instrument.

403.106 History History: 1995 a. 449.

403.107 403.107 Instrument payable in foreign money. Unless the instrument otherwise provides, an instrument that states the amount payable in foreign money may be paid in the foreign money or in an equivalent amount in dollars calculated by using the current bank-offered spot rate at the place of payment for the purchase of dollars on the day on which the instrument is paid.

403.107 History History: 1995 a. 449.

403.108 403.108 Payable on demand or at definite time.

403.108(1) (1) A promise or order is payable on demand if any of the following applies:

403.108(1)(a) (a) It states that it is payable on demand or at sight, or otherwise indicates that it is payable at the will of the holder.

403.108(1)(b) (b) It does not state any time of payment.

403.108(2) (2) A promise or order is payable at a definite time if it is payable on elapse of a definite period of time after sight or acceptance or at a fixed date or dates or at a time or times readily ascertainable at the time that the promise or order is issued, subject to any of the following rights:

403.108(2)(a) (a) Prepayment.

403.108(2)(b) (b) Acceleration.

403.108(2)(c) (c) Extension at the option of the holder.

403.108(2)(d) (d) Extension to a further definite time at the option of the maker or acceptor or automatically upon or after a specified act or event.

403.108(3) (3) If an instrument, payable at a fixed date, is also payable upon demand made before the fixed date, the instrument is payable on demand until the fixed date and, if demand for payment is not made before that date, becomes payable at a definite time on the fixed date.

403.108 History History: 1995 a. 449.

403.109 403.109 Payable to bearer or to order.

403.109(1) (1) A promise or order is payable to bearer if any of the following applies:

403.109(1)(a) (a) It states that it is payable to bearer or to the order of bearer or otherwise indicates that the person in possession of the promise or order is entitled to payment.

403.109(1)(b) (b) It does not state a payee.

403.109(1)(c) (c) It states that it is payable to or to the order of cash or otherwise indicates that it is not payable to an identified person.

403.109(2) (2) A promise or order that is not payable to bearer is payable to order if it is payable to the order of an identified person or to an identified person or order. A promise or order that is payable to order is payable to the identified person.

403.109(3) (3) An instrument payable to bearer may become payable to an identified person if it is specially endorsed under s. 403.205 (1). An instrument payable to an identified person may become payable to bearer if it is endorsed in blank under s. 403.205 (2).

403.109 History History: 1995 a. 449.

403.110 403.110 Identification of person to whom instrument is payable.

403.110(1) (1) The person to whom an instrument is initially payable is determined by the intent of the person, whether or not authorized, signing as, or in the name or behalf of, the issuer of the instrument. The instrument is payable to the person intended by the signer even if that person is identified in the instrument by a name or other identification that is not that of the intended person. If more than one person signs in the name or behalf of the issuer of an instrument and all of the signers do not intend the same person as payee, the instrument is payable to any person intended by one or more of the signers.

403.110(2) (2) If the signature of the issuer of an instrument is made by automated means, such as a checkwriting machine, the payee of the instrument is determined by the intent of the person who supplied the name or identification of the payee, whether or not authorized to do so.

403.110(3) (3) A person to whom an instrument is payable may be identified in any way, including by name, identifying number, office or account number. For the purpose of determining the holder of an instrument, the following rules apply:

403.110(3)(a) (a) If an instrument is payable to an account and the account is identified only by number, the instrument is payable to the person to whom the account is payable. If an instrument is payable to an account identified by number and by the name of a person, the instrument is payable to the named person, whether or not that person is the owner of the account identified by number.

403.110(3)(b) (b) If an instrument is payable to:

403.110(3)(b)1. 1. A trust, an estate or a person described as trustee or representative of a trust or estate, the instrument is payable to the trustee, the representative or a successor of either, whether or not the beneficiary or estate is also named.

403.110(3)(b)2. 2. A person described as agent or similar representative of a named or identified person, the instrument is payable to the represented person, the representative or a successor of the representative.

403.110(3)(b)3. 3. A fund or organization that is not a legal entity, the instrument is payable to a representative of the members of the fund or organization.

403.110(3)(b)4. 4. An office or to a person described as holding an office, the instrument is payable to the named person, the incumbent of the office or a successor to the incumbent.

403.110(4) (4) If an instrument is payable to 2 or more persons alternatively, it is payable to any of them and may be negotiated, discharged or enforced by any or all of them in possession of the instrument. If an instrument is payable to 2 or more persons not alternatively, it is payable to all of them and may be negotiated, discharged or enforced only by all of them. If an instrument payable to 2 or more persons is ambiguous as to whether it is payable to the persons alternatively, the instrument is payable to the persons alternatively.

403.110 History History: 1995 a. 449.

403.111 403.111 Place of payment. Except as otherwise provided for items in ch. 404, an instrument is payable at the place of payment stated in the instrument. If no place of payment is stated, an instrument is payable at the address of the drawee or maker stated in the instrument. If no address is stated, the place of payment is the place of business of the drawee or maker. If a drawee or maker has more than one place of business, the place of payment is any place of business of the drawee or maker chosen by the person entitled to enforce the instrument. If the drawee or maker has no place of business, the place of payment is the residence of the drawee or maker.

403.111 History History: 1995 a. 449.

403.112 403.112 Interest.

403.112(1) (1) Unless otherwise provided in the instrument, an instrument is not payable with interest, and interest on an interest-bearing instrument is payable from the date of the instrument.

403.112(2) (2) Interest may be stated in an instrument as a fixed or variable amount of money or it may be expressed as a fixed or variable rate or rates. The amount or rate of interest may be stated or described in the instrument in any manner and may require reference to information not contained in the instrument. If an instrument provides for interest, but the amount of interest payable cannot be ascertained from the description, interest is payable at the judgment rate in effect at the place of payment of the instrument and at the time that interest first accrues.

403.112 History History: 1995 a. 449.

403.113 403.113 Date of instrument.

403.113(1) (1) An instrument may be antedated or postdated. The date stated determines the time of payment if the instrument is payable at a fixed period after date. Except as provided in s. 404.401 (3), an instrument payable on demand is not payable before the date of the instrument.

403.113(2) (2) If an instrument is undated, its date is the date of its issue or, in the case of an unissued instrument, the date that it first comes into possession of a holder.

403.113 History History: 1995 a. 449.

403.114 403.114 Contradictory terms of instrument. If an instrument contains contradictory terms, typewritten terms prevail over printed terms, handwritten terms prevail over both and words prevail over numbers.

403.114 History History: 1995 a. 449.

403.115 403.115 Incomplete instrument.

403.115(1) (1) “Incomplete instrument” means a signed writing, whether or not issued by the signer, the contents of which show at the time of signing that it is incomplete but that the signer intended it to be completed by the addition of words or numbers.

403.115(2) (2) Subject to sub. (3), if an incomplete instrument is an instrument under s. 403.104, it may be enforced according to its terms if it is not completed, or according to its terms as augmented by completion. If an incomplete instrument is not an instrument under s. 403.104, but, after completion, the requirements of s. 403.104 are met, the instrument may be enforced according to its terms as augmented by completion.

403.115(3) (3) If words or numbers are added to an incomplete instrument without authority of the signer, there is an alteration of the incomplete instrument under s. 403.407.