409.327 Priority of security interests in deposit account.
409.328 409.329 409.330 409.331 409.332 409.333 409.334 409.335 409.336 409.337 409.338 409.339 409.340 409.341 409.342
409.401 409.402 409.403 409.404 409.405 409.406 409.407 409.408 409.409
409.501 409.502 409.503 409.504 409.505 409.506 409.507 409.508 409.509 409.510 409.511 409.512 409.513 409.514 409.515 409.516 409.517 409.518 409.519 409.520 409.521 409.522 409.523 409.524 409.525 409.526 409.527 409.528
409.601 409.602 409.603 409.604 409.605 409.606
Priority of security interests in investment property. Priority of security interests in letter-of-credit right. Priority of purchaser of chattel paper or instrument. Priority of rights of purchasers of instruments, documents, and securities under other chapters; priority of interests in financial assets and security entitlements under ch. 408. Transfer of money; transfer of funds from deposit account. Priority of certain liens arising by operation of law. Priority of security interests in fixtures and crops. Accessions. Commingled goods. Priority of security interests in goods covered by certificate of title. Priority of security interest or agricultural lien perfected by filed financing statement providing certain incorrect information. Priority subject to subordination. Effectiveness of right of recoupment or setoff against deposit account. Bank’s rights and duties with respect to deposit account. Bank’s right to refuse to enter into or disclose existence of control agreement. SUBCHAPTER IV RIGHTS OF 3RD PARTIES Alienability of debtor’s rights. Secured party not obligated on contract of debtor or in tort. Agreement not to assert defenses against assignee. Rights acquired by assignee; claims and defenses against assignee. Modification of assigned contract. Discharge of account debtor; notification of assignment; identification and proof of assignment; restrictions on assignment of accounts, chattel paper, payment intangibles, and promissory notes ineffective. Restrictions on creation or enforcement of security interest in leasehold interest or in leasor’s residual interest. Restrictions on assignment of promissory notes, health-care-insurance receivables, and certain general intangibles ineffective. Restrictions on assignment of letter-of-credit rights ineffective. SUBCHAPTER V FILING Filing office. Contents of financing statement; record of mortgage as financing statement; time of filing financing statement. Name of debtor and secured party. Indication of collateral. Filing and compliance with other statutes and treaties for consignments, leases, other bailments, and other transactions. Effect of errors or omissions. Effect of certain events on effectiveness of financing statement. Effectiveness of financing statement if new debtor becomes bound by security agreement. Persons entitled to file a record. Effectiveness of filed record. Secured party of record. Amendment of financing statement. Termination statement. Assignment of powers of secured party of record. Duration and effectiveness of financing statement; effect of lapsed financing statement. What constitutes filing; effectiveness of filing. Effect of indexing errors. Claim concerning inaccurate or wrongfully filed record. Numbering, maintaining, and indexing records; communicating information provided in records. Acceptance and refusal to accept record; social security numbers. Uniform form of written financing statement and amendment. Maintenance and destruction of records. Information from filing office; sale or license of records. Delay by filing office. Fees. Filing-office rules. Duty to report. Statewide lien system. SUBCHAPTER VI DEFAULT Rights after default; judicial enforcement; consignor or buyer of accounts, chattel paper, payment intangibles, or promissory notes. Waiver and variance of rights and duties. Agreement on standards concerning rights and duties. Procedure if security agreement covers real property or fixtures. Unknown debtor or secondary obligor. Time of default for agricultural lien.
May 22, 2026, are designated by NOTES. (Published 5-22-26)
409.101
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UCC — SECURED TRANSACTIONS
409.607 Collection and enforcement by secured party. 409.608 Application of proceeds of collection or enforcement; liability for deficiency and right to surplus. 409.609 Secured party’s right to take possession after default. 409.610 Disposition of collateral after default. 409.611 Notification before disposition of collateral. 409.612 Timeliness of notification before disposition of collateral. 409.613 Contents and form of notification before disposition of collateral: general. 409.614 Contents and form of notification before disposition of collateral: consumer-goods transaction. 409.615 Application of proceeds of disposition; liability for deficiency and right to surplus. 409.616 Explanation of calculation of surplus or deficiency. 409.617 Rights of transferee of collateral. 409.618 Rights and duties of certain secondary obligors. 409.619 Transfer of record or legal title. 409.620 Acceptance of collateral in full or partial satisfaction of obligation; compulsory disposition of collateral. 409.621 Notification of proposal to accept collateral. 409.622 Effect of acceptance of collateral. 409.623 Right to redeem collateral. 409.624 Waiver. 409.625 Remedies for secured party’s failure to comply with chapter. 409.626 Action in which deficiency or surplus is in issue. 409.627 Determination of whether conduct was commercially reasonable. 409.628 Nonliability and limitation on liability of secured party; liability of secondary obligor.
Cross-reference: See definitions in s. 401.201.
SUBCHAPTER I GENERAL PROVISIONS 409.101 Short title. This chapter may be cited as uniform commercial code — secured transactions. History: 2001 a. 10. Revised UCC Article 9: Compliance Tips for Creditors and Debtors. Farnam & Pleviak. Wis. Law. July/Aug. 2013.
409.102 Definitions and index of definitions. (1) CHAPTER 409 DEFINITIONS. In this chapter: (a) “Accession” means goods that are physically united with other goods in such a manner that the identity of the original goods is not lost. (ag) “Account,” except as used in “account for,” means a right to payment of a monetary obligation, whether or not earned by performance; for property that has been or is to be sold, leased, licensed, assigned, or otherwise disposed of; for services rendered or to be rendered; for a policy of insurance issued or to be issued; for a secondary obligation incurred or to be incurred; for energy provided or to be provided; for the use or hire of a vessel under a charter or other contract; arising out of the use of a credit or charge card or information contained on or for use with the card; or as winnings in a lottery or other game of chance operated or sponsored by a state, governmental unit of a state, or person licensed or authorized to operate the game by a state or governmental unit of a state. The term includes health-care-insurance receivables. The term does not include rights to payment evidenced by chattel paper or an instrument; commercial tort claims; deposit accounts; investment property; letter-of-credit rights or letters of credit; or rights to payment for money or funds advanced or sold, other than rights arising out of the use of a credit or charge card or information contained on or for use with the card. (am) “Account debtor” means a person obligated on an account, chattel paper, or general intangible. The term does not include persons obligated to pay a negotiable instrument, even if the instrument constitutes part of chattel paper. (as) “Accounting,” except as used in “accounting for,” means a record:
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SUBCHAPTER VII TRANSITION 409.702 409.703 409.704 409.705 409.706 409.707 409.708 409.709 409.710
409.802 409.803 409.804 409.805 409.806 409.807 409.808 409.809
Savings clause. Security interest perfected before effective date. Security interest unperfected before effective date. Effectiveness of action taken before effective date. When initial financing statement suffices to continue effectiveness of financing statement. Amendment of preeffective-date financing statement. Persons entitled to file initial financing statement or continuation statement. Priority. Special transitional provision for maintaining and searching local filing office records. SUBCHAPTER VIII TRANSITION PROVISIONS FOR 2010 AMENDMENTS Savings clause. Security interest perfected before effective date. Security interest unperfected before effective date. Effectiveness of action taken before effective date. When initial financing statement suffices to continue effectiveness of financing statement. Amendment of preeffective-date financing statement. Persons entitled to file initial financing statement or continuation statement. Priority.
1. Authenticated by a secured party; 2. Indicating the aggregate unpaid secured obligations as of a date not more than 35 days earlier or 35 days later than the date of the record; and 3. Identifying the components of the obligations in reasonable detail. (b) “Agricultural lien” means an interest, other than a security interest, in farm products: 1. Which secures payment or performance of an obligation for: a. Goods or services furnished in connection with a debtor’s farming operation; or b. Rent on real property leased by a debtor in connection with its farming operation; 2. Which is created by statute in favor of a person that: a. In the ordinary course of its business furnished goods or services to a debtor in connection with a debtor’s farming operation; or b. Leased real property to a debtor in connection with the debtor’s farming operation; and 3. Whose effectiveness does not depend on the person’s possession of the personal property. (bcm) “Applicant” means a person at whose request or for whose account a letter of credit is issued. The term includes a person who requests an issuer to issue a letter of credit on behalf of another if the person making the request undertakes an obligation to reimburse the issuer. (bg) “As-extracted collateral” means: 1. Oil, gas, or other minerals that are subject to a security interest that is created by a debtor having an interest in the minerals before extraction and which attaches to the minerals as extracted; or 2. Accounts arising out of the sale at the wellhead or minehead of oil, gas, or other minerals in which the debtor had an interest before extraction. (bm) “Authenticate” means: 1. To sign; or 2. With present intent to adopt or accept a record, to attach to or logically associate with the record an electronic sound, symbol, or process.
May 22, 2026, are designated by NOTES. (Published 5-22-26)
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(bs) “Bank” means an organization that is engaged in the business of banking. The term includes savings banks, savings and loan associations, credit unions, and trust companies. (btm) “Beneficiary” means a person who under the terms of a letter of credit is entitled to have its complying presentation honored. The term includes a person to whom drawing rights have been transferred under a transferable letter of credit. (c) “Cash proceeds” means proceeds that are money, checks, deposit accounts, or the like. (cg) “Certificate of title” means a certificate of title with respect to which a statute provides for the security interest in question to be indicated on the certificate as a condition or result of the security interest’s obtaining priority over the rights of a lien creditor with respect to the collateral. The term includes another record maintained as an alternative to a certificate of title by the governmental unit that issues certificates of title if a statute permits the security interest in question to be indicated on the record as a condition or result of the security interest’s obtaining priority over the rights of a lien creditor with respect to the collateral. (cm) “Chattel paper” means a record or records that evidence both a monetary obligation and a security interest in specific goods, a security interest in specific goods and software used in the goods, a security interest in specific goods and license of software used in the goods, a lease of specific goods, or a lease of specific goods and license of software used in the goods. The term does not include charters or other contracts involving the use or hire of a vessel. The term does not include records that evidence a right to payment arising out of the use of a credit or charge card or information contained on or for use with the card. If a transaction is evidenced by records that include an instrument or series of instruments, the group of records taken together constitutes chattel paper. In this paragraph, “monetary obligation” means a monetary obligation secured by the goods or owned under a lease of the goods and includes a monetary obligation with respect to software used in the goods. (cs) “Collateral” means the property subject to a security interest or agricultural lien. The term includes: 1. Proceeds to which a security interest attaches; 2. Accounts, chattel paper, payment intangibles, and promissory notes that have been sold; and 3. Goods that are the subject of a consignment. (d) “Commercial tort claim” means a claim arising in tort with respect to which: 1. The claimant is an organization; or 2. The claimant is an individual and the claim: a. Arose in the course of the claimant’s business or profession; and b. Does not include damages arising out of personal injury to or the death of an individual. (dg) “Commodity account” means an account maintained by a commodity intermediary in which a commodity contract is carried for a commodity customer. (dm) “Commodity contract” means a commodity futures contract, an option on a commodity futures contract, a commodity option, or another contract if the contract or option is: 1. Traded on or subject to the rules of a board of trade that has been designated as a contract market for such a contract pursuant to federal commodities laws; or 2. Traded on a foreign commodity board of trade, exchange, or market, and is carried on the books of a commodity intermediary for a commodity customer. (ds) “Commodity customer” means a person for which a commodity intermediary carries a commodity contract on its books.
UCC — SECURED TRANSACTIONS
409.102
(e) “Commodity intermediary” means a person that: 1. Is registered as a futures commission merchant under federal commodities law; or 2. In the ordinary course of its business provides clearance or settlement services for a board of trade that has been designated as a contract market pursuant to federal commodities law. (eg) “Communicate” means: 1. To send a written or other tangible record; 2. To transmit a record by any means agreed upon by the persons sending and receiving the record; or 3. In the case of transmission of a record to or by a filing office, to transmit a record by any means prescribed by filing-office rule. (em) “Consignee” means a merchant to which goods are delivered in a consignment. (es) “Consignment” means a transaction, regardless of its form, in which a person delivers goods to a merchant for the purpose of sale and: 1. The merchant: a. Deals in goods of that kind under a name other than the name of the person making delivery; b. Is not an auctioneer; and c. Is not generally known by its creditors to be substantially engaged in selling the goods of others; 2. With respect to each delivery, the aggregate value of the goods is $1,000 or more at the time of delivery; 3. The goods are not consumer goods immediately before delivery; and 4. The transaction does not create a security interest that secures an obligation. (f) “Consignor” means a person that delivers goods to a consignee in a consignment. (fg) “Consumer debtor” means a debtor in a consumer transaction. (fm) “Consumer goods” means goods that are used or bought for use primarily for personal, family, or household purposes. (fs) “Consumer-goods transaction” means a consumer transaction in which: 1. An individual incurs an obligation primarily for personal, family, or household purposes; and 2. A security interest in consumer goods secures the obligation. (g) “Consumer obligor” means an obligor who is an individual and who incurred the obligation as part of a transaction entered into primarily for personal, family, or household purposes. (gg) “Consumer transaction” means a transaction in which an individual incurs an obligation primarily for personal, family, or household purposes; a security interest secures the obligation; and the collateral is held or acquired primarily for personal, family, or household purposes. The term includes consumer-goods transactions. (gm) “Continuation statement” means an amendment of a financing statement which: 1. Identifies, by its file number, the initial financing statement to which it relates; and 2. Indicates that it is a continuation statement for, or that it is filed to continue the effectiveness of, the identified financing statement. (gs) “Debtor” means: 1. A person having an interest, other than a security interest or other lien, in the collateral, whether or not the person is an obligor;
May 22, 2026, are designated by NOTES. (Published 5-22-26)
409.102
UCC — SECURED TRANSACTIONS
2. A seller of accounts, chattel paper, payment intangibles, or promissory notes; or 3. A consignee. (h) “Deposit account” means a demand, time, savings, passbook, or similar account maintained with a bank. The term does not include investment property or accounts evidenced by an instrument. (hg) “Document” means a document of title or a receipt of the type described in s. 407.201 (2). (hm) “Electronic chattel paper” means chattel paper evidenced by a record or records consisting of information stored in an electronic medium. (hs) “Encumbrance” means a right, other than an ownership interest, in real property. The term includes mortgages and other liens on real property. (i) “Equipment” means goods other than inventory, farm products, or consumer goods. (ig) “Farm products” means goods, other than standing timber, with respect to which the debtor is engaged in a farming operation and which are: 1. Crops grown, growing, or to be grown, including: a. Crops produced on trees, vines, and bushes; and b. Aquatic goods produced in aquacultural operations; 2. Livestock, born or unborn, including aquatic goods produced in aquacultural operations; 3. Supplies used or produced in a farming operation; or 4. Products of crops or livestock in their unmanufactured states. (im) “Farming operation” means raising, cultivating, propagating, fattening, grazing, or any other farming, livestock, or aquacultural operation. (is) “File number” means the number assigned to an initial financing statement pursuant to s. 409.519 (1). (j) “Filing office” means an office designated in s. 409.501 as the place to file a financing statement. (jg) “Filing-office rule” means a rule promulgated pursuant to s. 409.526. (jm) “Financing statement” means a record or records composed of an initial financing statement and any filed record relating to the initial financing statement. (js) “Fixture filing” means the filing of a financing statement covering goods that are or are to become fixtures and satisfying s. 409.502 (1) and (2). The term includes the filing of a financing statement covering goods of a transmitting utility which are or are to become fixtures. (k) “Fixtures” means goods that have become so related to particular real property that an interest in them arises under real property law. (kg) “General intangible” means any personal property, including things in action, other than accounts, chattel paper, commercial tort claims, deposit accounts, documents, goods, instruments, investment property, letter-of-credit rights, letters of credit, money, and oil, gas, or other minerals before extraction. The term includes payment intangibles and software. (km) “Good faith” means honesty in fact in the conduct or transaction concerned. (ks) “Goods” means all things that are movable when a security interest attaches. The term includes fixtures; standing timber that is to be cut and removed under a conveyance or contract for sale; the unborn young of animals; crops grown, growing, or to be grown, even if the crops are produced on trees, vines, or bushes; and manufactured homes. The term also includes a computer program embedded in goods and any supporting information pro-
Updated 23-24 Wis. Stats.
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vided in connection with a transaction relating to the program if the program is associated with the goods in such a manner that it customarily is considered part of the goods, or by becoming the owner of the goods, a person acquires a right to use the program in connection with the goods. The term does not include a computer program embedded in goods that consist solely of the medium in which the program is embedded. The term also does not include accounts, chattel paper, commercial tort claims, deposit accounts, documents, general intangibles, instruments, investment property, letter-of-credit rights, letters of credit, money, or oil, gas, or other minerals before extraction. (L) “Governmental unit” means a subdivision, agency, department, county, parish, municipality, or other unit of the government of the United States, a state, or a foreign country. The term includes an organization having a separate corporate existence if the organization is eligible to issue debt on which interest is exempt from income taxation under the laws of the United States. (Lg) “Health-care-insurance receivable” means an interest in or claim under a policy of insurance which is a right to payment of a monetary obligation for health-care goods or services provided. (Lm) “Instrument” means a negotiable instrument or any other writing that evidences a right to the payment of a monetary obligation, is not itself a security agreement or lease, and is of a type that in ordinary course of business is transferred by delivery with any necessary endorsement or assignment. The term does not include investment property; letters of credit; or writings that evidence a right to payment arising out of the use of a credit or charge card or information contained on or for use with the card. (Ls) “Inventory” means goods, other than farm products, which: 1. Are leased by a person as lessor; 2. Are held by a person for sale or lease or to be furnished under a contract of service; 3. Are furnished by a person under a contract of service; or 4. Consist of raw materials, work in process, or materials used or consumed in a business. (m) “Investment property” means a security, whether certificated or uncertificated, security entitlement, securities account, commodity contract, or commodity account. (mcm) “Issuer” means a bank or other person that issues a letter of credit, but does not include an individual who makes an engagement for personal, family, or household purposes. (mg) “Jurisdiction of organization,” with respect to a registered organization, means the jurisdiction under whose law the organization is formed or organized. (mkm) “Letter of credit” means a definite undertaking that satisfies the requirements of s. 405.104 by an issuer to a beneficiary at the request or for the account of an applicant or, in the case of a financial institution, to itself or for its own account, to honor a documentary presentation by payment or delivery of an item of value. (mm) “Letter-of-credit right” means a right to payment or performance under a letter of credit, whether or not the beneficiary has demanded or is at the time entitled to demand payment or performance. The term does not include the right of a beneficiary to demand payment or performance under a letter of credit. (ms) “Lien creditor” means: 1. A creditor that has acquired a lien on the property involved by attachment, levy, or the like; 2. An assignee for benefit of creditors from the time of assignment; 3. A trustee in bankruptcy from the date of the filing of the petition; or
May 22, 2026, are designated by NOTES. (Published 5-22-26)
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4. A receiver in equity from the time of appointment. (n) “Manufactured home” means a structure, transportable in one or more sections, which, in the traveling mode, is 8 body feet or more in width or 40 body feet or more in length, or, when erected on site, is 320 or more square feet, and which is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air-conditioning, and electrical systems contained therein. The term includes any structure that meets all of the requirements of this paragraph except the size requirements and with respect to which the manufacturer voluntarily files a certification required by the U.S. secretary of housing and urban development and complies with the standards established under title 42 of the U.S. code. (ng) “Manufactured-home transaction” means a secured transaction: 1. That creates a purchase-money security interest in a manufactured home, other than a manufactured home held as inventory; or 2. In which a manufactured home, other than a manufactured home held as inventory, is the primary collateral. (nm) “Mortgage” means a consensual interest in real property, including fixtures, which secures payment or performance of an obligation. (ns) “New debtor” means a person that becomes bound as a debtor under s. 409.203 (4) by a security agreement previously entered into by another person. (o) “New value” means money; money’s worth in property, services, or new credit; or release by a transferee of an interest in property previously transferred to the transferee. The term does not include an obligation substituted for another obligation. (odm) “Nominated person” means a person whom the issuer: 1. Designates or authorizes to pay, accept, negotiate, or otherwise give value under a letter of credit; and 2. Undertakes by agreement or custom and practice to reimburse. (og) “Noncash proceeds” means proceeds other than cash proceeds. (om) “Obligor” means a person that, with respect to an obligation secured by a security interest in or an agricultural lien on the collateral, owes payment or other performance of the obligation; has provided property other than the collateral to secure payment or other performance of the obligation; or is otherwise accountable in whole or in part for payment or other performance of the obligation. The term does not include issuers or nominated persons under a letter of credit. (os) “Original debtor,” except as used in s. 409.310 (3), means a person that, as a debtor, entered into a security agreement to which a new debtor has become bound under s. 409.203 (4). (p) “Payment intangible” means a general intangible under which the account debtor’s principal obligation is a monetary obligation. (pg) “Person related to,” with respect to an individual, means: 1. The spouse of the individual; 2. A brother, brother-in-law, sister, or sister-in-law of the individual; 3. An ancestor or lineal descendant of the individual or the individual’s spouse; or 4. Any other relative, by blood or marriage, of the individual or the individual’s spouse who shares the same home with the individual. (pm) “Person related to,” with respect to an organization, means:
UCC — SECURED TRANSACTIONS
409.102
1. A person directly or indirectly controlling, controlled by, or under common control with the organization; 2. An officer or director of, or a person performing similar functions with respect to, the organization; 3. An officer or director of, or a person performing similar functions with respect to, a person described in subd. 1.; 4. The spouse of an individual described in subd. 1., 2., or 3.; or 5. An individual who is related by blood or marriage to an individual described in subd. 1., 2., 3., or 4. and shares the same home with the individual. (ps) “Proceeds,” except as used in s. 409.609 (2), means the following property: 1. Whatever is acquired upon the sale, lease, license, exchange, or other disposition of collateral; 2. Whatever is collected on, or distributed on account of, collateral; 3. Rights arising out of collateral; 4. To the extent of the value of collateral, claims arising out of the loss, nonconformity, or interference with the use of, defects or infringement of rights in, or damage to, the collateral; or 5. To the extent of the value of collateral and to the extent payable to the debtor or the secured party, insurance payable by reason of the loss or nonconformity of, defects or infringement of rights in, or damage to, the collateral. (ptm) “Proceeds of a letter of credit” means the cash, check, accepted draft, or other item of value paid or delivered upon honor or giving of value by the issuer or any nominated person under the letter of credit. The term does not include a beneficiary’s drawing rights or documents presented by the beneficiary. (pu) “Production-money crops” means crops that secure a production-money obligation incurred with respect to the production of those crops. (pv) “Production-money obligation” means an obligation of an obligor incurred for new value given to enable the debtor to produce crops if the value is in fact used for the production of the crops. (pw) “Production of crops” means the use of seed, fertilizer, or chemicals for growing crops or protecting them from damage or disease. (q) “Promissory note” means an instrument that evidences a promise to pay a monetary obligation, does not evidence an order to pay, and does not contain an acknowledgment by a bank that the bank has received for deposit a sum of money or funds. (qg) “Proposal” means a record authenticated by a secured party which includes the terms on which the secured party is willing to accept collateral in full or partial satisfaction of the obligation it secures pursuant to ss. 409.620, 409.621, and 409.622. (qm) “Public-finance transaction” means a secured transaction in connection with which: 1. Debt securities are issued; 2. All or a portion of the securities issued have an initial stated maturity of at least 20 years; and 3. The debtor, obligor, secured party, account debtor or other person obligated on collateral, assignor or assignee of a secured obligation, or assignor or assignee of a security interest is a state or a governmental unit of a state. (qp) “Public organic record” means a record that is available to the public for inspection and is: 1. A record consisting of the record initially filed with or issued by a state or the United States to form or organize an organi-
May 22, 2026, are designated by NOTES. (Published 5-22-26)
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UCC — SECURED TRANSACTIONS
zation and any record filed with or issued by the state or the United States which amends or restates the initial record; 2. An organic record of a business trust consisting of the record initially filed with a state and any record filed with the state which amends or restates the initial record, if a statute of the state governing business trusts requires that the record be filed with the state; or 3. A record consisting of legislation enacted by the legislature of a state or the Congress of the United States which forms or organizes an organization, any record amending the legislation, and any record filed with or issued by the state or the United States which amends or restates the name of the organization. (qs) “Pursuant to commitment”, with respect to an advance made or other value given by a secured party, means pursuant to the secured party’s obligation, whether or not a subsequent event of default or other event not within the secured party’s control has relieved or may relieve the secured party from its obligation. (r) “Record,” except as used in “for record,” “of record,” “record or legal title,” and “record owner,” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form. (rg) “Registered organization” means an organization formed or organized solely under the law of a single state or the United States by the filing of a public organic record with, the issuance of a public organic record by, or the enactment of legislation by the state or the United States. The term includes a business trust that is formed or organized under the law of a single state if a statute of the state governing business trusts requires that the business trust’s organic record be filed with the state. (rm) “Secondary obligor” means an obligor to the extent that: 1. The obligor’s obligation is secondary; or 2. The obligor has a right of recourse with respect to an obligation secured by collateral against the debtor, another obligor, or property of either. (rs) “Secured party” means: 1. A person in whose favor a security interest is created or provided for under a security agreement, whether or not any obligation to be secured is outstanding; 2. A person that holds an agricultural lien; 3. A consignor; 4. A person to which accounts, chattel paper, payment intangibles, or promissory notes have been sold; 5. A trustee, indenture trustee, agent, collateral agent, or other representative in whose favor a security interest or agricultural lien is created or provided for; or 6. A person that holds a security interest arising under s. 402.401, 402.505, 402.711 (3), 404.210, 405.118, or 411.508 (5). (s) “Security agreement” means an agreement that creates or provides for a security interest. (sg) “Send,” in connection with a record or notification, means: 1. To deposit in the mail, deliver for transmission, or transmit by any other usual means of communication, with postage or cost of transmission provided for, addressed to any address reasonable under the circumstances; or 2. To cause the record or notification to be received within the time that it would have been received if properly sent under subd. 1. (sm) “Software” means a computer program and any supporting information provided in connection with a transaction relating to the program. The term does not include a computer program that is included in the definition of goods.
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(ss) “State” means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States. (t) “Supporting obligation” means a letter-of-credit right or secondary obligation that supports the payment or performance of an account, chattel paper, a document, a general intangible, an instrument, or investment property. (tg) “Tangible chattel paper” means chattel paper evidenced by a record or records consisting of information that is inscribed on a tangible medium. (tm) “Termination statement” means an amendment of a financing statement which: 1. Identifies, by its file number, the initial financing statement to which it relates; and 2. Indicates either that it is a termination statement or that the identified financing statement is no longer effective. (ts) “Transmitting utility” means a person primarily engaged in the business of: 1. Operating a railroad, subway, street railway, or trolley bus; 2. Transmitting communications electrically, electromagnetically, or by light; 3. Transmitting goods by pipeline or sewer; or 4. Transmitting or producing and transmitting electricity, steam, gas, or water. (2) DEFINITIONS IN OTHER CHAPTERS. The following definitions in other chapters apply to this chapter: (b) “Broker” — s. 408.102. (bm) “Certificated security” — s. 408.102. (c) “Check” — s. 403.104. (cm) “Clearing corporation” — s. 408.102. (d) “Contract for sale” — s. 402.106. (df) “Control” (with respect to a document of title) — s. 407.106. (dm) “Customer” — s. 404.104. (e) “Entitlement holder” — s. 408.102. (em) “Financial asset” — s. 408.102. (f) “Holder in due course” — s. 403.302. (g) “Issuer” (with respect to a security) — s. 408.201. (gm) “Lease” — s. 411.103. (h) “Lease agreement” — s. 411.103. (hm) “Lease contract” — s. 411.103. (i) “Leasehold interest” — s. 411.103. (im) “Lessee” — s. 411.103. (j) “Lessee in ordinary course of business” — s. 411.103. (jm) “Lessor” — s. 411.103. (k) “Lessor’s residual interest” — s. 411.103. (L) “Merchant” — s. 402.104. (Lm) “Negotiable instrument” — s. 403.104. (mm) “Note” — s. 403.104. (nm) “Prove” — s. 403.103. (o) “Sale” — s. 402.106. (om) “Securities account” — s. 408.501. (p) “Securities intermediary” — s. 408.102. (pm) “Security” — s. 408.102. (q) “Security certificate” — s. 408.102. (qm) “Security entitlement” — s. 408.102. (r) “Uncertificated security” — s. 408.102. (3) CHAPTER 401 DEFINITIONS AND PRINCIPLES. Chapter 401
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contains general definitions and principles of construction and interpretation applicable throughout this chapter. History: 2001 a. 10; 2003 a. 321; 2009 a. 322; 2011 a. 206; 2015 a. 196; 2017 a. 365 s. 111. A security interest in all of a trucking company’s “equipment” reasonably identified trucks as collateral. Milwaukee Mack Sales, Inc. v. First Wisconsin National Bank of Milwaukee, 93 Wis. 2d 589, 287 N.W.2d 708 (1980). Goods classified as “inventory” while in the possession of a debtor remain “inventory” while on lease status in the possession of the lessee. First Wisconsin National Bank of Milwaukee v. Ford Motor Credit Co., 94 Wis. 2d 622, 289 N.W.2d 288 (1980). NOTE: The above annotations cite to the pre-2001 Wis. Act 10 version of this chapter. There is a real difference between a claim from which proceeds arise and the proceeds themselves. Public policy does not prohibit the assignment of potential proceeds in a malpractice claim as a payment intangible. Concluding otherwise would contravene the clear meaning of the provisions of this chapter and could be seen as favoring lawyers against whom legal malpractice claims are filed. Attorney’s Title Guaranty Fund, Inc. v. Town Bank, 2014 WI 63, 355 Wis. 2d 229, 850 N.W.2d 28, 11-2774.
409.103 Purchase-money security interest; application of payments; burden of establishing. (1) DEFINITIONS. In this section: (a) “Purchase-money collateral” means goods or software that secures a purchase-money obligation incurred with respect to that collateral. (b) “Purchase-money obligation” means an obligation of an obligor incurred as all or part of the price of the collateral or for value given to enable the debtor to acquire rights in or the use of the collateral if the value is in fact so used. (2) PURCHASE-MONEY SECURITY INTEREST IN GOODS. A security interest in goods is a purchase-money security interest: (a) To the extent that the goods are purchase-money collateral with respect to that security interest; (b) If the security interest is in inventory that is or was purchase-money collateral, also to the extent that the security interest secures a purchase-money obligation incurred with respect to other inventory in which the secured party holds or held a purchase-money security interest; and (c) Also to the extent that the security interest secures a purchase-money obligation incurred with respect to software in which the secured party holds or held a purchase-money security interest. (3) PURCHASE-MONEY SECURITY INTEREST IN SOFTWARE. A security interest in software is a purchase-money security interest to the extent that the security interest also secures a purchasemoney obligation incurred with respect to goods in which the secured party holds or held a purchase-money security interest if: (a) The debtor acquired its interest in the software in an integrated transaction in which it acquired an interest in the goods; and (b) The debtor acquired its interest in the software for the principal purpose of using the software in the goods. (4) CONSIGNOR’S INVENTORY PURCHASE-MONEY SECURITY INTEREST. The security interest of a consignor in goods that are the subject of a consignment is a purchase-money security interest in inventory. (5) APPLICATION OF PAYMENT IN NONCONSUMER-GOODS TRANSACTION. In a transaction other than a consumer-goods transaction, if the extent to which a security interest is a purchasemoney security interest depends on the application of a payment to a particular obligation, the payment must be applied: (a) In accordance with any reasonable method of application to which the parties agree; (b) In the absence of the parties’ agreement to a reasonable method, in accordance with any intention of the obligor manifested at or before the time of payment; or (c) In the absence of an agreement to a reasonable method and
UCC — SECURED TRANSACTIONS
409.1035
a timely manifestation of the obligor’s intention, in the following order: 1. To obligations that are not secured; and 2. If more than one obligation is secured, to obligations secured by purchase-money security interests in the order in which those obligations were incurred. (6) NO LOSS OF STATUS OF PURCHASE-MONEY SECURITY INTEREST IN NONCONSUMER-GOODS TRANSACTION. In a transaction other than a consumer-goods transaction, a purchase-money security interest does not lose its status as such, even if: (a) The purchase-money collateral also secures an obligation that is not a purchase-money obligation; (b) Collateral that is not purchase-money collateral also secures the purchase-money obligation; or (c) The purchase-money obligation has been renewed, refinanced, consolidated, or restructured. (7) BURDEN OF PROOF IN NONCONSUMER-GOODS TRANSACTION. In a transaction other than a consumer-goods transaction, a secured party claiming a purchase-money security interest has the burden of establishing the extent to which the security interest is a purchase-money security interest. (8) NONCONSUMER-GOODS TRANSACTIONS; NO INFERENCE. The limitation of the rules in subs. (5) to (7) to transactions other than consumer-goods transactions is intended to leave to the court the determination of the proper rules in consumer-goods transactions. The court may not infer from that limitation the nature of the proper rule in consumer-goods transactions and may continue to apply established approaches. History: 2001 a. 10.
409.1035 Production-money crops; productionmoney obligation; production-money security interest; burden of establishing. (1) A security interest in crops is a production-money security interest to the extent that the crops are production-money crops. (2) If the extent to which a security interest is a productionmoney security interest depends on the application of a payment to a particular obligation, the payment must be applied in the following order until fully applied: (a) First, to all production-money obligations secured by production-money crops, in the order in which those obligations were incurred; (b) Second, to all obligations secured by conflicting security interests in the production-money crops referred to in par. (a), in the order in which those obligations were incurred; and (c) Third, to all unsecured obligations of the debtor making the payment, in the order in which those obligations were incurred. (3) A production-money security interest does not lose its status as such, even if: (a) The production-money crops also secure an obligation that is not a production-money obligation; (b) Collateral that is not production-money crops also secures the production-money obligation; or (c) The production-money obligation has been renewed, refinanced, or restructured. (4) A secured party claiming a production-money security interest has the burden of establishing the extent to which the security interest is a production-money security interest. (5) This section does not affect any right to proceeds under s. 409.315. (6) A person may not claim a purchase-money security interest in crops grown, growing, or to be grown. History: 2001 a. 10.
May 22, 2026, are designated by NOTES. (Published 5-22-26)
409.104
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409.104 Control of deposit account. (1) REQUIREMENTS FOR CONTROL. A secured party has control of a deposit account if: (a) The secured party is the bank with which the deposit account is maintained; (b) The debtor, secured party, and bank have agreed in an authenticated record that the bank will comply with instructions originated by the secured party directing disposition of the funds in the deposit account without further consent by the debtor; or (c) The secured party becomes the bank’s customer with respect to the deposit account. (2) DEBTOR’S RIGHT TO DIRECT DISPOSITION. A secured party that has satisfied sub. (1) has control, even if the debtor retains the right to direct the disposition of funds from the deposit account. History: 2001 a. 10.
409.105 Control of electronic chattel paper. (1m) GENERAL RULE: CONTROL OF ELECTRONIC CHATTEL PAPER. A secured party has control of electronic chattel paper if a system employed for evidencing the transfer of interests in the chattel paper reliably establishes the secured party as the person to which the chattel paper was assigned. (2m) SPECIFIC FACTS GIVING CONTROL. Without limiting the generality of sub. (1m), a system satisfies sub. (1m) if the record or records comprising the chattel paper are created, stored, and assigned in such a manner that: (a) A single authoritative copy of the record or records exists which is unique, identifiable, and, except as otherwise provided in pars. (d) to (f), unalterable; (b) The authoritative copy identifies the secured party as the assignee of the record or records; (c) The authoritative copy is communicated to and maintained by the secured party or its designated custodian; (d) Copies or amendments that add or change an identified assignee of the authoritative copy can be made only with the consent of the secured party; (e) Each copy of the authoritative copy and any copy of a copy is readily identifiable as a copy that is not the authoritative copy; and (f) Any amendment of the authoritative copy is readily identifiable as authorized or unauthorized. History: 2001 a. 10, 416; 2011 a. 206.
409.106 Control of investment property. (1) CONTROL UNDER S. 408.106. A person has control of a certificated security, uncertificated security, or security entitlement as provided in s. 408.106. (2) CONTROL OF COMMODITY CONTRACT. A secured party has control of a commodity contract if: (a) The secured party is the commodity intermediary with which the commodity contract is carried; or (b) The commodity customer, secured party, and commodity intermediary have agreed that the commodity intermediary will apply any value distributed on account of the commodity contract as directed by the secured party without further consent by the commodity customer. (3) EFFECT OF CONTROL OF SECURITIES ACCOUNT OR COMMODITY ACCOUNT. A secured party having control of all security entitlements or commodity contracts carried in a securities account or commodity account has control over the securities account or commodity account. History: 2001 a. 10.
409.107 Control of letter-of-credit right. A secured party
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has control of a letter-of-credit right to the extent of any right to payment or performance by the issuer or any nominated person if the issuer or nominated person has consented to an assignment of proceeds of the letter of credit under ch. 405 or otherwise applicable law or practice. History: 2001 a. 10.
409.108 Sufficiency of description. (1) SUFFICIENCY OF DESCRIPTION. Except as otherwise provided in subs. (3) to (5), a description of personal or real property is sufficient, whether or not it is specific, if it reasonably identifies what is described. (2) EXAMPLES OF REASONABLE IDENTIFICATION. Except as otherwise provided in sub. (4), a description of collateral reasonably identifies the collateral if it identifies the collateral by: (a) Specific listing; (b) Category; (c) Except as otherwise provided in sub. (5), a type of collateral defined in chs. 401 to 411; (d) Quantity; (e) Computational or allocational formula or procedure; or (f) Except as otherwise provided in sub. (3), any other method, if the identity of the collateral is objectively determinable. (3) SUPERGENERIC DESCRIPTION NOT SUFFICIENT. A description of collateral as “all the debtor’s assets” or “all the debtor’s personal property” or using words of similar import does not reasonably identify the collateral. (4) INVESTMENT PROPERTY. Except as otherwise provided in sub. (5), a description of a security entitlement, securities account, or commodity account is sufficient if it describes: (a) The collateral by those terms or as investment property; or (b) The underlying financial asset or commodity contract. (5) WHEN DESCRIPTION BY TYPE INSUFFICIENT. A description only by type of collateral defined in chs. 401 to 411 is an insufficient description of: (a) A commercial tort claim; or (b) In a consumer transaction, consumer goods, a security entitlement, a securities account, or a commodity account. History: 2001 a. 10. A wrong statement of section, township, range, and county where crops were grown was not minor, and, without directing further inquiry, was insufficient. Whether a party was misled by the description was not part of the inquiry under s. 409.110 or 409.402. Smith & Spidahl Enterprises, Inc. v. Lee, 206 Wis. 2d 663, 557 N.W.2d 865 (Ct. App. 1996), 96-0882. NOTE: The above annotation cites to the pre-2001 Wis. Act 10 version of this chapter.
409.109 Scope. (1) GENERAL SCOPE OF CHAPTER. Except as otherwise provided in subs. (3) and (4), and s. 16.63 (4) on transactions involving tobacco settlement revenues, this chapter applies to: (a) A transaction, regardless of its form, that creates a security interest in personal property or fixtures by contract; (b) An agricultural lien; (c) A sale of accounts, chattel paper, payment intangibles, or promissory notes; (d) A consignment; (e) A security interest arising under s. 402.401, 402.505, 402.711 (3), or 411.508 (5), as provided in s. 409.110; and (f) A security interest arising under s. 404.210 or 405.118. (2) SECURITY INTEREST IN SECURED OBLIGATION. The application of this chapter to a security interest in a secured obligation is not affected by the fact that the obligation is itself secured by a transaction or interest to which this chapter does not apply. (3) EXTENT TO WHICH CHAPTER DOES NOT APPLY. This chapter does not apply to the extent that:
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(a) A statute, regulation, or treaty of the United States preempts this chapter; (b) Another statute of this state expressly governs the creation, perfection, priority, or enforcement of a security interest created by this state or a governmental unit of this state; (c) A statute of another state, a foreign country, or a governmental unit of another state or a foreign country, other than a statute generally applicable to security interests, expressly governs creation, perfection, priority, or enforcement of a security interest created by the state, country, or governmental unit; or (d) The rights of a transferee beneficiary or nominated person under a letter of credit are independent and superior under ch. 405. (4) INAPPLICABILITY OF CHAPTER. This chapter does not apply to: (a) A landlord’s lien, other than an agricultural lien; (b) A lien, other than an agricultural lien, given by statute or other rule of law for services or materials, but s. 409.333 applies with respect to priority of the lien; (c) An assignment of a claim for wages, salary, or other compensation of an employee; (cm) An assignment of a claim or right to receive compensation for injuries or sickness under a worker’s compensation or worker’s disability statute of any state; (d) A sale of accounts, chattel paper, payment intangibles, or promissory notes as part of a sale of the business out of which they arose; (e) An assignment of accounts, chattel paper, payment intangibles, or promissory notes which is for the purpose of collection only; (f) An assignment of a right to payment under a contract to an assignee that is also obligated to perform under the contract; (g) An assignment of a single account, payment intangible, or promissory note to an assignee in full or partial satisfaction of a preexisting indebtedness; (h) A transfer of an interest in or an assignment of a claim under a policy of insurance, other than an assignment by or to a health-care provider of a health-care-insurance receivable and any subsequent assignment of the right to payment, but ss. 409.315 and 409.322 apply with respect to proceeds and priorities in proceeds; (i) An assignment of a right represented by a judgment, other than a judgment taken on a right to payment that was collateral; (j) A right of recoupment or setoff, but: 1. Section 409.340 applies with respect to the effectiveness of rights of recoupment or setoff against deposit accounts; and 2. Section 409.404 applies with respect to defenses or claims of an account debtor; (k) The creation or transfer of an interest in or lien on real property, including a lease or rents thereunder, except to the extent that provision is made for: 1. Liens on real property in ss. 409.203 and 409.308; 2. Fixtures in s. 409.334; 3. Fixture filings in ss. 409.501, 409.502, 409.512, 409.516, and 409.519; and 4. Security agreements covering personal and real property in s. 409.604; (L) An assignment of a claim arising in tort, other than a commercial tort claim, but ss. 409.315 and 409.322 apply with respect to proceeds and priorities in proceeds; or (m) An assignment of a deposit account in a consumer trans-
UCC — SECURED TRANSACTIONS
409.203
action, but ss. 409.315 and 409.322 apply with respect to proceeds and priorities in proceeds. History: 2001 a. 10, 64. There is a real difference between a claim from which proceeds arise and the proceeds themselves. Public policy does not prohibit the assignment of potential proceeds in a malpractice claim as a payment intangible. Concluding otherwise would contravene the clear meaning of the provisions of this chapter and could be seen as favoring lawyers against whom legal malpractice claims are filed. Attorney’s Title Guaranty Fund, Inc. v. Town Bank, 2014 WI 63, 355 Wis. 2d 229, 850 N.W.2d 28, 11-2774.
409.110 Security interests arising under ch. 402 or 411. A security interest arising under s. 402.401, 402.505, 402.711 (3), or 411.508 (5) is subject to this chapter. However, until the debtor obtains possession of the goods: (1) The security interest is enforceable, even if s. 409.203 (2) (c) has not been satisfied; (2) Filing is not required to perfect the security interest; (3) The rights of the secured party after default by the debtor are governed by ch. 402 or 411; and (4) The security interest has priority over a conflicting security interest created by the debtor. History: 2001 a. 10.
SUBCHAPTER II EFFECTIVENESS OF SECURITY AGREEMENT; ATTACHMENT OF SECURITY INTEREST; RIGHTS OF PARTIES TO SECURITY AGREEMENT 409.201 General effectiveness of security agreement. (1) GENERAL EFFECTIVENESS. Except as otherwise provided in chs. 401 to 411, a security agreement is effective according to its terms between the parties, against purchasers of the collateral, and against creditors. (2) APPLICABLE CONSUMER LAWS AND OTHER LAW. A transaction subject to this chapter is subject to any applicable rule of law which establishes a different rule for consumers and to chs. 138, 421 to 427, and 429 and s. 182.025. (3) OTHER APPLICABLE LAW CONTROLS. In case of conflict between this chapter and a rule of law, statute, or rule described in sub. (2), the rule of law, statute, or rule controls. Failure to comply with a statute or rule described in sub. (2) has only the effect the statute or rule specifies. (4) FURTHER DEFERENCE TO OTHER APPLICABLE LAW. This chapter does not: (a) Validate any rate, charge, agreement, or practice that violates a rule of law, statute, or rule described in sub. (2); or (b) Extend the application of the rule of law, statute, or rule to a transaction not otherwise subject to the rule of law, statute, or rule. History: 2001 a. 10.
409.202 Title to collateral immaterial. Except as otherwise provided with respect to consignments or sales of accounts, chattel paper, payment intangibles, or promissory notes, the provisions of this chapter with regard to rights and obligations apply whether title to collateral is in the secured party or the debtor. History: 2001 a. 10. A person with a voidable title in property, having the power to pass title to a good faith purchaser under s. 402.403, may transfer a security interest in that property. National Pawn Brokers Unlimited v. Osterman, Inc., 176 Wis. 2d 418, 500 N.W.2d 407 (Ct. App. 1993). NOTE: The above annotation cites to the pre-2001 Wis. Act 10 version of this section.
409.203 Attachment and enforceability of security interest; proceeds; supporting obligations; formal requisites. (1) ATTACHMENT. A security interest attaches to collat-
May 22, 2026, are designated by NOTES. (Published 5-22-26)
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UCC — SECURED TRANSACTIONS
eral when it becomes enforceable against the debtor with respect to the collateral, unless an agreement expressly postpones the time of attachment. (2) ENFORCEABILITY. Except as otherwise provided in subs. (3) to (9), a security interest is enforceable against the debtor and 3rd parties with respect to the collateral only if: (a) Value has been given; (b) The debtor has rights in the collateral or the power to transfer rights in the collateral to a secured party; and (c) One of the following conditions is met: 1. The debtor has authenticated a security agreement that provides a description of the collateral and, if the security interest covers timber to be cut, a description of the land concerned; 2. The collateral is not a certificated security and is in the possession of the secured party under s. 409.313 pursuant to the debtor’s security agreement; 3. The collateral is a certificated security in registered form and the security certificate has been delivered to the secured party under s. 408.301 pursuant to the debtor’s security agreement; or 4. The collateral is deposit accounts, electronic chattel paper, investment property, letter-of-credit rights, or electronic documents, and the secured party has control under s. 407.106, 409.104, 409.105, 409.106, or 409.107 pursuant to the debtor’s security agreement. (3) OTHER UNIFORM COMMERCIAL CODE PROVISIONS. Subsection (2) is subject to s. 404.210 on the security interest of a collecting bank, s. 405.118 on the security interest of a letter-ofcredit issuer or nominated person, s. 409.110 on a security interest arising under ch. 402 or 411, and s. 409.206 on security interests in investment property. (4) WHEN PERSON BECOMES BOUND BY ANOTHER PERSON’S SECURITY AGREEMENT. (a) A person becomes bound as debtor by a security agreement entered into by another person if, by operation of law other than this chapter or by contract: 1. The security agreement becomes effective to create a security interest in the person’s property; or 2. The person becomes generally obligated for the obligations of the other person, including the obligation secured under the security agreement, and acquires or succeeds to all or substantially all of the assets of the other person. (b) A security agreement authenticated by one spouse is authenticated by the debtor under this section if that spouse acting alone has the right under s. 766.51 to manage and control the collateral, unless a marital property agreement or court decree that is binding on the secured party under s. 766.55 (4m) or 766.56 (2) (c) provides otherwise. (5) EFFECT OF NEW DEBTOR BECOMING BOUND. If a new debtor becomes bound as debtor by a security agreement entered into by another person: (a) The agreement satisfies sub. (2) (c) with respect to existing or after-acquired property of the new debtor to the extent that the property is described in the agreement; and (b) Another agreement is not necessary to make a security interest in the property enforceable. (6) PROCEEDS AND SUPPORTING OBLIGATIONS. The attachment of a security interest in collateral gives the secured party the rights to proceeds provided by s. 409.315 and is also attachment of a security interest in a supporting obligation for the collateral. (7) LIEN SECURING RIGHT TO PAYMENT. The attachment of a security interest in a right to payment or performance secured by a security interest or other lien on personal or real property is also attachment of a security interest in the security interest, mortgage, or other lien.
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(8) SECURITY ENTITLEMENT CARRIED IN SECURITIES ACThe attachment of a security interest in a securities account is also attachment of a security interest in the security entitlements carried in the securities account. (9) COMMODITY CONTRACTS CARRIED IN COMMODITY ACCOUNT. The attachment of a security interest in a commodity account is also attachment of a security interest in the commodity contracts carried in the commodity account. COUNT.
History: 2001 a. 10; 2009 a. 322. A provision in an instrument prohibiting transfer of the instrument did not render a security interest in the instrument unenforceable. Belke v. M&I First National Bank of Stevens Point, 189 Wis. 2d 385, 525 N.W.2d 737 (Ct. App. 1994). If the terms of a security agreement establish that attachment is contingent on subsequent specification of the collateral, the secured party has no security interest before the satisfaction of the contingency. A security agreement requiring the designation of the accounts to serve as collateral gave no security interest when no designation was made. Sierra Finance Corp. v. Excel Laboratories, LLC, 223 Wis. 2d 694, 589 N.W.2d 432 (Ct. App. 1998), 97-2450. NOTE: The above annotations cite to the pre-2001 Wis. Act 10 version of this section. Sub. (7) is identical to section 9-203 (g) of the Uniform Commercial Code. The comment to section 9-203 (g) states, “Subsection (g) codifies the common-law rule that a transfer of an obligation secured by a security interest or other lien on personal or real property also transfers the security interest or lien” and supports the assertion that sub. (7) is intended to codify the common law doctrine of equitable assignment. It also supports the argument that the doctrine applies to real estate mortgages. Dow Family, LLC v. PHH Mortgage Corp., 2014 WI 56, 354 Wis. 2d 796, 848 N.W.2d 728, 13-0221.
409.204 After-acquired property; future advances. (1) AFTER-ACQUIRED COLLATERAL. Except as otherwise provided in sub. (2), a security agreement may create or provide for a security interest in after-acquired collateral. (2) WHEN AFTER-ACQUIRED PROPERTY CLAUSE NOT EFFECTIVE. A security interest does not attach under a term constituting an after-acquired property clause to: (a) Consumer goods, other than an accession when given as additional security, unless the debtor acquires rights in them within 10 days after the secured party gives value; or (b) A commercial tort claim. (3) FUTURE ADVANCES AND OTHER VALUE. A security agreement may provide that collateral secures, or that accounts, chattel paper, payment intangibles, or promissory notes are sold in connection with, future advances or other value, whether or not the advances or value are given pursuant to commitment. History: 2001 a. 10. A security agreement covering money lent “and all other obligations and liabilities” will not extend to obligations arising out of contract violations unless they were clearly within the intent of the parties. John Miller Supply Co. v. Western State Bank, 55 Wis. 2d 385, 199 N.W.2d 161 (1972). Priorities of “Future Advances” Under Previously Perfected Security Interests and Article 9 of the U.C.C. Wyant & Thiel. 58 MLR 759 (1975). Security Interests in After-Acquired Property Under the Uniform Commercial Code. Skilton. 1974 WLR 925. NOTE: The above annotations cite to the pre-2001 Wis. Act 10 version of this section.
409.205 Use or disposition of collateral permissible. (1) WHEN SECURITY INTEREST NOT INVALID OR FRAUDULENT. A security interest is not invalid or fraudulent against creditors solely because: (a) The debtor has the right or ability to: 1. Use, commingle, or dispose of all or part of the collateral, including returned or repossessed goods; 2. Collect, compromise, enforce, or otherwise deal with collateral; 3. Accept the return of collateral or make repossessions; or 4. Use, commingle, or dispose of proceeds; or (b) The secured party fails to require the debtor to account for proceeds or replace collateral. (2) REQUIREMENTS OF POSSESSION NOT RELAXED. This section does not relax the requirements of possession if attachment,
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perfection, or enforcement of a security interest depends upon possession of the collateral by the secured party. History: 2001 a. 10. Under this section, the debtor is freed from strict accountability to the secured creditor for the property secured, and the validity of a secured interest in after-acquired property is specifically recognized. When a creditor has a security interest in the debtor’s after-acquired property, the debtor is able to commingle the debtor’s property and use it to the debtor’s best interest. The acquiescence of the secured creditor under an after-acquired clause by the debtor does not invalidate the security interest of the creditor. Burlington National Bank v. Strauss, 50 Wis. 2d 270, 184 N.W.2d 122 (1971). NOTE: The above annotation cites to the pre-2001 Wis. Act 10 version of this section.
409.206 Security interest arising in purchase or delivery of financial asset. (1) SECURITY INTEREST WHEN PERSON BUYS THROUGH SECURITIES INTERMEDIARY. A security interest in favor of a securities intermediary attaches to a person’s security entitlement if: (a) The person buys a financial asset through the securities intermediary in a transaction in which the person is obligated to pay the purchase price to the securities intermediary at the time of the purchase; and (b) The securities intermediary credits the financial asset to the buyer’s securities account before the buyer pays the securities intermediary. (2) SECURITY INTEREST SECURES OBLIGATION TO PAY FOR FINANCIAL ASSET. The security interest described in sub. (1) secures the person’s obligation to pay for the financial asset. (3) SECURITY INTEREST IN PAYMENT AGAINST DELIVERY TRANSACTION. A security interest in favor of a person that delivers a certificated security or other financial asset represented by a writing attaches to the security or other financial asset if: (a) The security or other financial asset: 1. In the ordinary course of business is transferred by delivery with any necessary endorsement or assignment; and 2. Is delivered under an agreement between persons in the business of dealing with such securities or financial assets; and (b) The agreement calls for delivery against payment. (4) SECURITY INTEREST SECURES OBLIGATION TO PAY FOR DELIVERY. The security interest described in sub. (3) secures the obligation to make payment for the delivery. History: 2001 a. 10.
409.207 Rights and duties of secured party having possession or control of collateral. (1) DUTY OF CARE WHEN SECURED PARTY IN POSSESSION. Except as otherwise provided in sub. (4), a secured party shall use reasonable care in the custody and preservation of collateral in the secured party’s possession. In the case of chattel paper or an instrument, reasonable care includes taking necessary steps to preserve rights against prior parties unless otherwise agreed. (2) EXPENSES, RISKS, DUTIES, AND RIGHTS WHEN SECURED PARTY IN POSSESSION. Except as otherwise provided in sub. (4), if a secured party has possession of collateral: (a) Reasonable expenses, including the cost of insurance and payment of taxes or other charges, incurred in the custody, preservation, use, or operation of the collateral are chargeable to the debtor and are secured by the collateral; (b) The risk of accidental loss or damage is on the debtor to the extent of a deficiency in any effective insurance coverage; (c) The secured party shall keep the collateral identifiable, but fungible collateral may be commingled; and (d) The secured party may use or operate the collateral: 1. For the purpose of preserving the collateral or its value; 2. As permitted by an order of a court having competent jurisdiction; or
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3. Except in the case of consumer goods, in the manner and to the extent agreed by the debtor. (3) DUTIES AND RIGHTS WHEN SECURED PARTY IN POSSESSION OR CONTROL. Except as otherwise provided in sub. (4), a secured party having possession of collateral or control of collateral under s. 407.106, 409.104, 409.105, 409.106, or 409.107: (a) May hold as additional security any proceeds, except money or funds, received from the collateral; (b) Shall apply money or funds received from the collateral to reduce the secured obligation, unless remitted to the debtor; and (c) May create a security interest in the collateral. (4) BUYER OF CERTAIN RIGHTS TO PAYMENT. If the secured party is a buyer of accounts, chattel paper, payment intangibles, or promissory notes or a consignor: (a) Subsection (1) does not apply unless the secured party is entitled under an agreement: 1. To charge back uncollected collateral; or 2. Otherwise to full or limited recourse against the debtor or a secondary obligor based on the nonpayment or other default of an account debtor or other obligor on the collateral; and (b) Subsections (1) and (2) do not apply. History: 2001 a. 10; 2009 a. 322. Sub. (2) (c) requiring the application of increase or profits received by a secured property on property held as collateral did not apply to a security deposit paid on a car lease. Doe v. General Motors Acceptance Corp., 2001 WI App 199, 247 Wis. 2d 564, 635 N.W.2d 7, 00-1564. Sub. (2) (c) does not require putting money held as security in an interest bearing account. That a bank has the beneficial use of money does not mean that interest is earned that must be applied under sub. (2) (c). Demitropoulos v. Bank One Milwaukee, N.A., 953 F. Supp. 974 (1997). NOTE: The above annotations cite to the pre-2001 Wis. Act 10 version of this section.
409.208 Additional duties of secured party having control of collateral. (1) APPLICABILITY OF SECTION. This section applies to cases in which there is no outstanding secured obligation and the secured party is not committed to make advances, incur obligations, or otherwise give value. (2) DUTIES OF SECURED PARTY AFTER RECEIVING DEMAND FROM DEBTOR. Within 10 days after receiving an authenticated demand by the debtor: (a) A secured party having control of a deposit account under s. 409.104 (1) (b) shall send to the bank with which the deposit account is maintained an authenticated statement that releases the bank from any further obligation to comply with instructions originated by the secured party; (b) A secured party having control of a deposit account under s. 409.104 (1) (c) shall: 1. Pay the debtor the balance on deposit in the deposit account; or 2. Transfer the balance on deposit into a deposit account in the debtor’s name; (c) A secured party, other than a buyer, having control of electronic chattel paper under s. 409.105 shall: 1. Communicate the authoritative copy of the electronic chattel paper to the debtor or its designated custodian; 2. If the debtor designates a custodian that is the designated custodian with which the authoritative copy of the electronic chattel paper is maintained for the secured party, communicate to the custodian an authenticated record releasing the designated custodian from any further obligation to comply with instructions originated by the secured party and instructing the custodian to comply with instructions originated by the debtor; and 3. Take appropriate action to enable the debtor or its designated custodian to make copies of or revisions to the authoritative copy which add or change an identified assignee of the authoritative copy without the consent of the secured party;
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(d) A secured party having control of investment property under s. 408.106 (4) (b) or 409.106 (2) shall send to the securities intermediary or commodity intermediary with which the security entitlement or commodity contract is maintained an authenticated record that releases the securities intermediary or commodity intermediary from any further obligation to comply with entitlement orders or directions originated by the secured party; (e) A secured party having control of a letter-of-credit right under s. 409.107 shall send to each person having an unfulfilled obligation to pay or deliver proceeds of the letter of credit to the secured party an authenticated release from any further obligation to pay or deliver proceeds of the letter of credit to the secured party; and (f) A secured party having control of an electronic document shall do all of the following: 1. Give control of the electronic document to the debtor or its designated custodian. 2. If the debtor designates a custodian that is the designated custodian with which the authoritative copy of the electronic document is maintained for the secured party, communicate to the custodian an authenticated record releasing the designated custodian from any further obligation to comply with instructions originated by the secured party and instructing the custodian to comply with instructions originated by the debtor. 3. Take appropriate action to enable the debtor or its designated custodian to make copies of or revisions to the authoritative copy which add or change an identified assignee of the authoritative copy without the consent of the secured party. History: 2001 a. 10; 2009 a. 322.
409.209 Duties of secured party if account debtor has been notified of assignment. (1) APPLICABILITY OF SECTION. Except as otherwise provided in sub. (3), this section applies if: (a) There is no outstanding secured obligation; and (b) The secured party is not committed to make advances, incur obligations, or otherwise give value. (2) DUTIES OF SECURED PARTY AFTER RECEIVING DEMAND FROM DEBTOR. Within 10 days after receiving an authenticated demand by the debtor, a secured party shall send to an account debtor that has received notification of an assignment to the secured party as assignee under s. 409.406 (1) an authenticated record that releases the account debtor from any further obligation to the secured party. (3) INAPPLICABILITY TO SALES. This section does not apply to an assignment constituting the sale of an account, chattel paper, or payment intangible. History: 2001 a. 10.
409.210 Request for accounting; request regarding list of collateral or statement of account. (1) DEFINITIONS. In this section: (a) “Request” means a record of a type described in par. (b), (c), or (d). (b) “Request for an accounting” means a record authenticated by a debtor requesting that the recipient provide an accounting of the unpaid obligations secured by collateral and reasonably identifying the transaction or relationship that is the subject of the request. (c) “Request regarding a list of collateral” means a record authenticated by a debtor requesting that the recipient approve or correct a list of what the debtor believes to be the collateral securing an obligation and reasonably identifying the transaction or relationship that is the subject of the request. (d) “Request regarding a statement of account” means a
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record authenticated by a debtor requesting that the recipient approve or correct a statement indicating what the debtor believes to be the aggregate amount of unpaid obligations secured by collateral as of a specified date and reasonably identifying the transaction or relationship that is the subject of the request. (2) DUTY TO RESPOND TO REQUESTS. Subject to subs. (3) to (6), a secured party, other than a buyer of accounts, chattel paper, payment intangibles, or promissory notes or a consignor, shall comply with a request within 14 days after receipt: (a) In the case of a request for an accounting, by authenticating and sending to the debtor an accounting; and (b) In the case of a request regarding a list of collateral or a request regarding a statement of account, by authenticating and sending to the debtor an approval or correction. (3) REQUEST REGARDING LIST OF COLLATERAL; STATEMENT CONCERNING TYPE OF COLLATERAL. A secured party that claims a security interest in all of a particular type of collateral owned by the debtor may comply with a request regarding a list of collateral by sending to the debtor an authenticated record including a statement to that effect within 14 days after receipt. (4) REQUEST REGARDING LIST OF COLLATERAL; NO INTEREST CLAIMED. A person that receives a request regarding a list of collateral, claims no interest in the collateral when it receives the request, and claimed an interest in the collateral at an earlier time shall comply with the request within 14 days after receipt by sending to the debtor an authenticated record: (a) Disclaiming any interest in the collateral; and (b) If known to the recipient, providing the name and mailing address of any assignee of or successor to the recipient’s interest in the collateral. (5) REQUEST FOR ACCOUNTING OR REGARDING STATEMENT OF ACCOUNT; NO INTEREST IN OBLIGATION CLAIMED. A person that receives a request for an accounting or a request regarding a statement of account, claims no interest in the obligations when it receives the request, and claimed an interest in the obligations at an earlier time shall comply with the request within 14 days after receipt by sending to the debtor an authenticated record: (a) Disclaiming any interest in the obligations; and (b) If known to the recipient, providing the name and mailing address of any assignee of or successor to the recipient’s interest in the obligations. (6) CHARGES FOR RESPONSES. A debtor is entitled without charge to one response to a request under this section during any 6-month period. The secured party may require payment of a charge not exceeding $25 for each additional response. History: 2001 a. 10.
SUBCHAPTER III PERFECTION AND PRIORITY 409.301 Law governing perfection and priority of security interests. Except as otherwise provided in ss. 409.303 to 409.306, the following rules determine the law governing perfection, the effect of perfection or nonperfection, and the priority of a security interest in collateral: (1) LOCATION OF DEBTOR. Except as otherwise provided in this section, while a debtor is located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in collateral. (2) LOCATION OF COLLATERAL. While collateral is located in a jurisdiction, the local law of that jurisdiction governs perfec-
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tion, the effect of perfection or nonperfection, and the priority of a possessory security interest in that collateral. (3) LOCATION OF PROPERTY. Except as otherwise provided in sub. (4), while tangible negotiable documents, goods, instruments, money, or tangible chattel paper is located in a jurisdiction, the local law of that jurisdiction governs: (a) Perfection of a security interest in the goods by filing a fixture filing; (b) Perfection of a security interest in timber to be cut; and (c) The effect of perfection or nonperfection and the priority of a nonpossessory security interest in the collateral. (4) LOCATION OF WELLHEAD OR MINEHEAD. The local law of the jurisdiction in which the wellhead or minehead is located governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in as-extracted collateral. History: 2001 a. 10; 2009 a. 322.
409.302 Law governing perfection and priority of agricultural liens. While farm products are located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of an agricultural lien on the farm products. History: 2001 a. 10.
409.303 Law governing perfection and priority of security interests in goods covered by a certificate of title. (1) APPLICABILITY OF SECTION. This section applies to goods covered by a certificate of title, even if there is no other relationship between the jurisdiction under whose certificate of title the goods are covered and the goods or the debtor. (2) WHEN GOODS COVERED BY CERTIFICATE OF TITLE. Goods become covered by a certificate of title when a valid application for the certificate of title and the applicable fee are delivered to the appropriate authority. Goods cease to be covered by a certificate of title at the earlier of the time the certificate of title ceases to be effective under the law of the issuing jurisdiction or the time the goods become covered subsequently by a certificate of title issued by another jurisdiction. (3) APPLICABLE LAW. The local law of the jurisdiction under whose certificate of title the goods are covered governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in goods covered by a certificate of title from the time the goods become covered by the certificate of title until the goods cease to be covered by the certificate of title. History: 2001 a. 10.
409.304 Law governing perfection and priority of security interests in deposit accounts. (1) LAW OF BANK’S JURISDICTION GOVERNS. The local law of a bank’s jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a deposit account maintained with that bank. (2) BANK’S JURISDICTION. The following rules determine a bank’s jurisdiction for purposes of this subchapter: (a) If an agreement between the bank and the debtor governing the deposit account expressly provides that a particular jurisdiction is the bank’s jurisdiction for purposes of this subchapter, this chapter, or chs. 401 to 411, that jurisdiction is the bank’s jurisdiction. (b) If par. (a) does not apply and an agreement between the bank and its customer governing the deposit account expressly provides that the agreement is governed by the law of a particular jurisdiction, that jurisdiction is the bank’s jurisdiction. (c) If neither par. (a) nor par. (b) applies and an agreement between the bank and its customer governing the deposit account expressly provides that the deposit account is maintained at an of-
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fice in a particular jurisdiction, that jurisdiction is the bank’s jurisdiction. (d) If none of pars. (a) to (c) applies, the bank’s jurisdiction is the jurisdiction in which the office identified in an account statement as the office serving the customer’s account is located. (e) If none of pars. (a) to (d) applies, the bank’s jurisdiction is the jurisdiction in which the chief executive office of the bank is located. History: 2001 a. 10.
409.305 Law governing perfection and priority of security interests in investment property. (1) GOVERNING LAW: GENERAL RULES. Except as otherwise provided in sub. (3), the following rules apply: (a) While a security certificate is located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in the certificated security represented thereby. (b) The local law of the issuer’s jurisdiction as specified in s. 408.110 (4) governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in an uncertificated security. (c) The local law of the securities intermediary’s jurisdiction as specified in s. 408.110 (5) governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a security entitlement or securities account. (d) The local law of the commodity intermediary’s jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a commodity contract or commodity account. (2) COMMODITY INTERMEDIARY’S JURISDICTION. The following rules determine a commodity intermediary’s jurisdiction for purposes of this subchapter: (a) If an agreement between the commodity intermediary and commodity customer governing the commodity account expressly provides that a particular jurisdiction is the commodity intermediary’s jurisdiction for purposes of this subchapter, this chapter, or chs. 401 to 411, that jurisdiction is the commodity intermediary’s jurisdiction. (b) If par. (a) does not apply and an agreement between the commodity intermediary and commodity customer governing the commodity account expressly provides that the agreement is governed by the law of a particular jurisdiction, that jurisdiction is the commodity intermediary’s jurisdiction. (c) If neither par. (a) nor par. (b) applies and an agreement between the commodity intermediary and commodity customer governing the commodity account expressly provides that the commodity account is maintained at an office in a particular jurisdiction, that jurisdiction is the commodity intermediary’s jurisdiction. (d) If none of pars. (a) to (c) applies, the commodity intermediary’s jurisdiction is the jurisdiction in which the office identified in an account statement as the office serving the commodity customer’s account is located. (e) If none of pars. (a) to (d) applies, the commodity intermediary’s jurisdiction is the jurisdiction in which the chief executive office of the commodity intermediary is located. (3) WHEN PERFECTION GOVERNED BY LAW OF JURISDICTION WHERE DEBTOR LOCATED. The local law of the jurisdiction in which the debtor is located governs: (a) Perfection of a security interest in investment property by filing; (b) Automatic perfection of a security interest in investment property created by a broker or securities intermediary; and
May 22, 2026, are designated by NOTES. (Published 5-22-26)
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(c) Automatic perfection of a security interest in a commodity contract or commodity account created by a commodity intermediary. History: 2001 a. 10.
409.306 Law governing perfection and priority of security interests in letter-of-credit rights. (1) GOVERNING LAW: ISSUER’S OR NOMINATED PERSON’S JURISDICTION. Subject to sub. (3), the local law of the issuer’s jurisdiction or a nominated person’s jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a letter-of-credit right if the issuer’s jurisdiction or nominated person’s jurisdiction is a state. (2) ISSUER’S OR NOMINATED PERSON’S JURISDICTION. For purposes of this subchapter, an issuer’s jurisdiction or nominated person’s jurisdiction is the jurisdiction whose law governs the liability of the issuer or nominated person with respect to the letterof-credit right as provided in ch. 405. (3) WHEN SECTION NOT APPLICABLE. This section does not apply to a security interest that is perfected only under s. 409.308 (4). History: 2001 a. 10.
409.307 Location of debtor. (1) PLACE OF BUSINESS. In this section, “place of business” means a place where a debtor conducts its affairs. (2) DEBTOR’S LOCATION: GENERAL RULES. Except as otherwise provided in this section, the following rules determine a debtor’s location: (a) A debtor who is an individual is located at the individual’s principal residence. (b) A debtor that is an organization and has only one place of business is located at its place of business. (c) A debtor that is an organization and has more than one place of business is located at its chief executive office. (3) LIMITATION OF APPLICABILITY OF SUB. (2). Subsection (2) applies only if a debtor’s residence, place of business, or chief executive office, as applicable, is located in a jurisdiction whose law generally requires information concerning the existence of a nonpossessory security interest to be made generally available in a filing, recording, or registration system as a condition or result of the security interest’s obtaining priority over the rights of a lien creditor with respect to the collateral. If sub. (2) does not apply, the debtor is located in the District of Columbia. (4) CONTINUATION OF LOCATION: CESSATION OF EXISTENCE. A person that ceases to exist, have a residence, or have a place of business continues to be located in the jurisdiction specified by subs. (2) and (3). (5) LOCATION OF REGISTERED ORGANIZATION ORGANIZED UNDER STATE LAW. A registered organization that is organized under the law of a state is located in that state. (6) LOCATION OF REGISTERED ORGANIZATION ORGANIZED UNDER FEDERAL LAW; BANK BRANCHES AND AGENCIES. Except as otherwise provided in sub. (9), a registered organization that is organized under the law of the United States and a branch or agency of a bank that is not organized under the law of the United States or a state are located: (a) In the state that the law of the United States designates, if the law designates a state of location; (b) In the state that the registered organization, branch, or agency designates, if the law of the United States authorizes the registered organization, branch, or agency to designate its state of location, including by designating its main office, home office, or other comparable office; or
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(c) In the District of Columbia, if neither par. (a) nor par. (b) applies. (7) CONTINUATION OF LOCATION: CHANGE IN STATUS OF REGISTERED ORGANIZATION. A registered organization continues to be located in the jurisdiction specified by sub. (5) or (6) notwithstanding: (a) The suspension, revocation, forfeiture, or lapse of the registered organization’s status as such in its jurisdiction of organization; or (b) The dissolution, winding up, or cancellation of the existence of the registered organization. (8) LOCATION OF UNITED STATES. The United States is located in the District of Columbia. (9) LOCATION OF FOREIGN BANK BRANCH OR AGENCY IF LICENSED IN ONLY ONE STATE. A branch or agency of a bank that is not organized under the law of the United States or a state is located in the state in which the branch or agency is licensed, if all branches and agencies of the bank are licensed in only one state. (10) LOCATION OF FOREIGN AIR CARRIER. A foreign air carrier under the Federal Aviation Act of 1958, as amended, is located at the designated office of the agent upon which service of process may be made on behalf of the carrier. (11) SECTION APPLIES ONLY TO THIS SUBCHAPTER. This section applies only for purposes of this subchapter. History: 2001 a. 10; 2011 a. 206.
409.308 When security interest or agricultural lien is perfected; continuity of perfection. (1) PERFECTION OF SECURITY INTEREST. Except as otherwise provided in this section and s. 409.309, a security interest is perfected if it has attached and all of the applicable requirements for perfection in ss. 409.310 to 409.316 have been satisfied. A security interest is perfected when it attaches if the applicable requirements are satisfied before the security interest attaches. (2) PERFECTION OF AGRICULTURAL LIEN. An agricultural lien is perfected if it has become effective and all of the applicable requirements for perfection in s. 409.310 have been satisfied. An agricultural lien is perfected when it becomes effective if the applicable requirements are satisfied before the agricultural lien becomes effective. (3) CONTINUOUS PERFECTION; PERFECTION BY DIFFERENT METHODS. A security interest or agricultural lien is perfected continuously if it is originally perfected by one method under this chapter and is later perfected by another method under this chapter, without an intermediate period when it was unperfected. (4) SUPPORTING OBLIGATION. Perfection of a security interest in collateral also perfects a security interest in a supporting obligation for the collateral. (5) LIEN SECURING RIGHT TO PAYMENT. Perfection of a security interest in a right to payment or performance also perfects a security interest in a security interest, mortgage, or other lien on personal or real property securing the right. (6) SECURITY ENTITLEMENT CARRIED IN SECURITIES ACCOUNT. Perfection of a security interest in a securities account also perfects a security interest in the security entitlements carried in the securities account. (7) COMMODITY CONTRACT CARRIED IN COMMODITY ACCOUNT. Perfection of a security interest in a commodity account also perfects a security interest in the commodity contracts carried in the commodity account. History: 2001 a. 10.
409.309 Security interest perfected upon attachment. The following security interests are perfected when they attach: (1) A purchase-money security interest in consumer goods,
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except as otherwise provided in s. 409.311 (2) with respect to consumer goods that are subject to a statute or treaty described in s. 409.311 (1); (2) An assignment of accounts or payment intangibles which does not by itself or in conjunction with other assignments to the same assignee transfer a significant part of the assignor’s outstanding accounts or payment intangibles; (3) A sale of a payment intangible; (4) A sale of a promissory note; (5) A security interest created by the assignment of a healthcare-insurance receivable to the provider of the health-care goods or services; (6) A security interest arising under s. 402.401, 402.505, 402.711 (3), or 411.508 (5), until the debtor obtains possession of the collateral; (7) A security interest of a collecting bank arising under s. 404.210; (8) A security interest of an issuer or nominated person arising under s. 405.118; (9) A security interest arising in the delivery of a financial asset under s. 409.206 (3); (10) A security interest in investment property created by a broker or securities intermediary; (11) A security interest in a commodity contract or a commodity account created by a commodity intermediary; (12) An assignment for the benefit of all creditors of the transferor and subsequent transfers by the assignee thereunder; and (13) A security interest created by an assignment of a beneficial interest in a decedent’s estate. History: 2001 a. 10.
409.310 When filing required to perfect security interest or agricultural lien; security interests and agricultural liens to which filing provisions do not apply. (1) GENERAL RULE: PERFECTION BY FILING. Except as otherwise provided in sub. (2) and s. 409.312 (2), a financing statement must be filed to perfect all security interests and agricultural liens. (2) EXCEPTIONS: FILING NOT NECESSARY. The filing of a financing statement is not necessary to perfect a security interest: (a) That is perfected under s. 409.308 (4), (5), (6), or (7); (b) That is perfected under s. 409.309 when it attaches; (c) In property subject to a statute, regulation, or treaty described in s. 409.311 (1); (d) In goods in possession of a bailee which is perfected under s. 409.312 (4) (a) or (b); (e) In certificated securities, documents, goods, or instruments which is perfected without filing, control, or possession under s. 409.312 (5), (6), or (7); (f) In collateral in the secured party’s possession under s. 409.313; (g) In a certificated security which is perfected by delivery of the security certificate to the secured party under s. 409.313; (h) In deposit accounts, electronic chattel paper, electronic documents, investment property, or letter-of-credit rights which is perfected by control under s. 409.314; (i) In proceeds which is perfected under s. 409.315; or (j) That is perfected under s. 409.316. (3) ASSIGNMENT OF PERFECTED SECURITY INTEREST. If a secured party assigns a perfected security interest or agricultural lien, a filing under this chapter is not required to continue the per-
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fected status of the security interest against creditors of and transferees from the original debtor. History: 2001 a. 10; 2009 a. 322.
409.311 Perfection of security interests in property subject to certain statutes, regulations, and treaties. (1) SECURITY INTEREST SUBJECT TO OTHER LAW. Except as otherwise provided in sub. (4), the filing of a financing statement is not necessary or effective to perfect a security interest in property subject to: (a) A statute, regulation, or treaty of the United States whose requirements for a security interest’s obtaining priority over the rights of a lien creditor with respect to the property preempt s. 409.310 (1). (b) The following vehicle title statutes: ss. 342.19 and 342.20. (bm) The following boat title statutes: ss. 30.57, 30.572, and 30.573. (c) A statute of another jurisdiction which provides for a security interest to be indicated on a certificate of title as a condition or result of the security interest’s obtaining priority over the rights of a lien creditor with respect to the property. (d) Sections 182.025 and 190.11 and other statutes providing for central filing. (e) A master lease entered into by the state under s. 16.76 (4). (f) The manufactured home security interest provisions under subch. V of ch. 101. (2) COMPLIANCE WITH OTHER LAW. Compliance with the requirements of a statute, regulation, or treaty described in sub. (1) for obtaining priority over the rights of a lien creditor is equivalent to the filing of a financing statement under this chapter. Except as otherwise provided in sub. (4) and ss. 409.313 and 409.316 (4) and (5) for goods covered by a certificate of title, a security interest in property subject to a statute, regulation, or treaty described in sub. (1) may be perfected only by compliance with those requirements, and a security interest so perfected remains perfected notwithstanding a change in the use or transfer of possession of the collateral. (3) DURATION AND RENEWAL OF PERFECTION. Except as otherwise provided in sub. (4) and s. 409.316 (4) and (5), duration and renewal of perfection of a security interest perfected by compliance with the requirements prescribed by a statute, regulation, or treaty described in sub. (1) are governed by the statute, regulation, or treaty. In other respects, the security interest is subject to this chapter. (4) INAPPLICABILITY TO CERTAIN INVENTORY. During any period in which collateral subject to a statute specified in sub. (1) (b), (bm), or (f) is inventory held for sale or lease by a person or leased by that person as lessor and that person is in the business of selling goods of that kind, this section does not apply to a security interest in that collateral created by that person. History: 2001 a. 10; 2011 a. 206.
409.312 Perfection of security interests in chattel paper, deposit accounts, documents, goods covered by documents, instruments, investment property, letterof-credit rights, and money; perfection by permissive filing; temporary perfection without filing or transfer of possession. (1) PERFECTION BY FILING PERMITTED. A security interest in chattel paper, negotiable documents, instruments, or investment property may be perfected by filing. (2) CONTROL OR POSSESSION OF CERTAIN COLLATERAL. Except as otherwise provided in s. 409.315 (3) and (4) for proceeds: (a) A security interest in a deposit account may be perfected only by control under s. 409.314; (b) And except as otherwise provided in s. 409.308 (4), a se-
May 22, 2026, are designated by NOTES. (Published 5-22-26)
409.312
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curity interest in a letter-of-credit right may be perfected only by control under s. 409.314; and (c) A security interest in money may be perfected only by the secured party’s taking possession under s. 409.313. (3) GOODS COVERED BY NEGOTIABLE DOCUMENT. While goods are in the possession of a bailee that has issued a negotiable document covering the goods: (a) A security interest in the goods may be perfected by perfecting a security interest in the document; and (b) A security interest perfected in the document has priority over any security interest that becomes perfected in the goods by another method during that time. (4) GOODS COVERED BY NONNEGOTIABLE DOCUMENT. While goods are in the possession of a bailee that has issued a nonnegotiable document covering the goods, a security interest in the goods may be perfected by: (a) Issuance of a document in the name of the secured party; (b) The bailee’s receipt of notification of the secured party’s interest; or (c) Filing as to the goods. (5) TEMPORARY PERFECTION: NEW VALUE. A security interest in certificated securities, negotiable documents, or instruments is perfected without filing or the taking of possession or control for a period of 20 days from the time it attaches to the extent that it arises for new value given under an authenticated security agreement. (6) TEMPORARY PERFECTION: GOODS OR DOCUMENTS MADE AVAILABLE TO DEBTOR. A perfected security interest in a negotiable document or goods in possession of a bailee, other than one that has issued a negotiable document for the goods, remains perfected for 20 days without filing if the secured party makes available to the debtor the goods or documents representing the goods for the purpose of: (a) Ultimate sale or exchange; or (b) Loading, unloading, storing, shipping, transshipping, manufacturing, processing, or otherwise dealing with them in a manner preliminary to their sale or exchange. (7) TEMPORARY PERFECTION: DELIVERY OF SECURITY CERTIFICATE OR INSTRUMENT TO DEBTOR. A perfected security interest in a certificated security or instrument remains perfected for 20 days without filing if the secured party delivers the security certificate or instrument to the debtor for the purpose of: (a) Ultimate sale or exchange; or (b) Presentation, collection, enforcement, renewal, or registration of transfer. (8) EXPIRATION OF TEMPORARY PERFECTION. After the 20day period specified in sub. (5), (6), or (7) expires, perfection depends upon compliance with this chapter. History: 2001 a. 10; 2009 a. 322.
409.313 When possession by or delivery to secured party perfects security interest without filing. (1) PERFECTION BY POSSESSION OR DELIVERY. Except as otherwise provided in sub. (2), a secured party may perfect a security interest in tangible negotiable documents, goods, instruments, money, or tangible chattel paper by taking possession of the collateral. A secured party may perfect a security interest in certificated securities by taking delivery of the certificated securities under s. 408.301. (2) GOODS COVERED BY CERTIFICATE OF TITLE. With respect to goods covered by a certificate of title issued by this state, a secured party may perfect a security interest in the goods by taking possession of the goods only in the circumstances described in s. 409.316 (4).
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(3) COLLATERAL IN POSSESSION OF PERSON OTHER THAN DEBTOR. With respect to collateral other than certificated securities and goods covered by a document, a secured party takes possession of collateral in the possession of a person other than the debtor, the secured party, or a lessee of the collateral from the debtor in the ordinary course of the debtor’s business, when: (a) The person in possession authenticates a record acknowledging that the person holds possession of the collateral for the secured party’s benefit; or (b) The person takes possession of the collateral after having authenticated a record acknowledging that the person will hold possession of collateral for the secured party’s benefit. (4) TIME OF PERFECTION BY POSSESSION; CONTINUATION OF PERFECTION. If perfection of a security interest depends upon possession of the collateral by a secured party, perfection occurs no earlier than the time the secured party takes possession and continues only while the secured party retains possession. (5) TIME OF PERFECTION BY DELIVERY; CONTINUATION OF PERFECTION. A security interest in a certificated security in registered form is perfected by delivery when delivery of the certificated security occurs under s. 408.301 and remains perfected by delivery until the debtor obtains possession of the security certificate. (6) ACKNOWLEDGMENT NOT REQUIRED. A person in possession of collateral is not required to acknowledge that it holds possession for a secured party’s benefit. (7) EFFECTIVENESS OF ACKNOWLEDGMENT; NO DUTIES OR CONFIRMATION. If a person acknowledges that it holds possession for the secured party’s benefit: (a) The acknowledgment is effective under sub. (3) or s. 408.301 (1), even if the acknowledgment violates the rights of a debtor; and (b) Unless the person otherwise agrees or law other than this chapter otherwise provides, the person does not owe any duty to the secured party and is not required to confirm the acknowledgment to another person. (8) SECURED PARTY’S DELIVERY TO PERSON OTHER THAN DEBTOR. A secured party having possession of collateral does not relinquish possession by delivering the collateral to a person other than the debtor or a lessee of the collateral from the debtor in the ordinary course of the debtor’s business if the person was instructed before the delivery or is instructed contemporaneously with the delivery: (a) To hold possession of the collateral for the secured party’s benefit; or (b) To redeliver the collateral to the secured party. (9) EFFECT OF DELIVERY UNDER SUB. (8); NO DUTIES OR CONFIRMATION. A secured party does not relinquish possession, even if a delivery under sub. (8) violates the rights of a debtor. A person to which collateral is delivered under sub. (8) does not owe any duty to the secured party and is not required to confirm the delivery to another person unless the person otherwise agrees or law other than this chapter otherwise provides. History: 2001 a. 10; 2009 a. 322.
409.314 Perfection by control. (1) PERFECTION BY CONTROL. A security interest in investment property, deposit accounts, letter-of-credit rights, electronic chattel paper, or electronic documents may be perfected by control of the collateral under s. 407.106, 409.104, 409.105, 409.106, or 409.107. (2) SPECIFIED COLLATERAL: TIME OF PERFECTION BY CONTROL; CONTINUATION OF PERFECTION. A security interest in deposit accounts, electronic chattel paper, letter-of-credit rights, or electronic documents is perfected by control under s. 407.106, 409.104, 409.105, or 409.107 when the secured party obtains
May 22, 2026, are designated by NOTES. (Published 5-22-26)
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control and remains perfected by control only while the secured party retains control. (3) INVESTMENT PROPERTY: TIME OF PERFECTION BY CONTROL; CONTINUATION OF PERFECTION. A security interest in investment property is perfected by control under s. 409.106 from the time the secured party obtains control and remains perfected by control until: (a) The secured party does not have control; and (b) One of the following occurs: 1. If the collateral is a certificated security, the debtor has or acquires possession of the security certificate; 2. If the collateral is an uncertificated security, the issuer has registered or registers the debtor as the registered owner; or 3. If the collateral is a security entitlement, the debtor is or becomes the entitlement holder. History: 2001 a. 10; 2009 a. 322.
409.315 Secured party’s rights on disposition of collateral and in proceeds. (1) DISPOSITION OF COLLATERAL: CONTINUATION OF SECURITY INTEREST OR AGRICULTURAL LIEN; PROCEEDS. Except as otherwise provided in this chapter and in s. 402.403 (2): (a) A security interest or agricultural lien continues in collateral notwithstanding sale, lease, license, exchange, or other disposition thereof unless the secured party authorized the disposition free of the security interest or agricultural lien; and (b) A security interest attaches to any identifiable proceeds of collateral. (2) WHEN COMMINGLED PROCEEDS IDENTIFIABLE. Proceeds that are commingled with other property are identifiable proceeds: (a) If the proceeds are goods, to the extent provided by s. 409.336; and (b) If the proceeds are not goods, to the extent that the secured party identifies the proceeds by a method of tracing, including application of equitable principles, that is permitted under law other than this chapter with respect to commingled property of the type involved. (3) PERFECTION OF SECURITY INTEREST IN PROCEEDS. A security interest in proceeds is a perfected security interest if the security interest in the original collateral was perfected. (4) CONTINUATION OF PERFECTION. A perfected security interest in proceeds becomes unperfected on the 21st day after the security interest attaches to the proceeds unless: (a) The following conditions are satisfied: 1. A filed financing statement covers the original collateral; 2. The proceeds are collateral in which a security interest may be perfected by filing in the office in which the financing statement has been filed; and 3. The proceeds are not acquired with cash proceeds; (b) The proceeds are identifiable cash proceeds; or (c) The security interest in the proceeds is perfected other than under sub. (3) when the security interest attaches to the proceeds or within 20 days thereafter. (5) WHEN PERFECTED SECURITY INTEREST IN PROCEEDS BECOMES UNPERFECTED. If a filed financing statement covers the original collateral, a security interest in proceeds which remains perfected under sub. (4) (a) becomes unperfected at the later of: (a) When the effectiveness of the filed financing statement lapses under s. 409.515 or is terminated under s. 409.513; or (b) The 21st day after the security interest attaches to the proceeds. History: 2001 a. 10. If a security agreement does not explicitly provide that transfer of collateral con-
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stitutes default and the secured party is not entitled to immediate possession, sale of collateral is not a conversion. Production Credit Ass’n of Chippewa Falls v. Equity Coop Livestock Sales Ass’n, 82 Wis. 2d 5, 261 N.W.2d 127 (1978). The rights of a security holder in collateral survive the transfer of the collateral under s. 409.311 made without the secured party’s consent. Production Credit Ass’n of Madison v. Nowatzski, 90 Wis. 2d 344, 280 N.W.2d 118 (1979). A condition imposed by a secured party on authorization to sell collateral is ineffective unless performance of the condition is within the buyer’s control. Production Credit Ass’n of Baraboo v. Pillsbury Co., 132 Wis. 2d 243, 392 N.W.2d 445 (Ct. App. 1986). NOTE: The above annotations cite to the pre-2001 Wis. Act 10 version of this chapter.
409.316 Effect of change in governing law. (1) GENERAL RULE: EFFECT ON PERFECTION OF CHANGE IN GOVERNING LAW. A security interest perfected pursuant to the law of the jurisdiction designated in s. 409.301 (1) or 409.305 (3) remains perfected until the earliest of: (a) The time perfection would have ceased under the law of that jurisdiction; (b) The expiration of 4 months after a change of the debtor’s location to another jurisdiction; or (c) The expiration of one year after a transfer of collateral to a person that thereby becomes a debtor and is located in another jurisdiction. (2) SECURITY INTEREST PERFECTED OR UNPERFECTED UNDER LAW OF NEW JURISDICTION. If a security interest described in sub. (1) becomes perfected under the law of the other jurisdiction before the earliest time or event described in that subsection, it remains perfected thereafter. If the security interest does not become perfected under the law of the other jurisdiction before the earliest time or event, it becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value. (3) POSSESSORY SECURITY INTEREST IN COLLATERAL MOVED TO NEW JURISDICTION. A possessory security interest in collateral, other than goods covered by a certificate of title and as-extracted collateral consisting of goods, remains continuously perfected if: (a) The collateral is located in one jurisdiction and subject to a security interest perfected under the law of that jurisdiction; (b) Thereafter the collateral is brought into another jurisdiction; and (c) Upon entry into the other jurisdiction, the security interest is perfected under the law of the other jurisdiction. (4) GOODS COVERED BY CERTIFICATE OF TITLE FROM THIS STATE. Except as otherwise provided in sub. (5), a security interest in goods covered by a certificate of title which is perfected by any method under the law of another jurisdiction when the goods become covered by a certificate of title from this state remains perfected until the security interest would have become unperfected under the law of the other jurisdiction had the goods not become so covered. (5) WHEN SUB. (4) SECURITY INTEREST BECOMES UNPERFECTED AGAINST PURCHASERS. A security interest described in sub. (4) becomes unperfected as against a purchaser of the goods for value and is deemed never to have been perfected as against a purchaser of the goods for value if the applicable requirements for perfection under s. 409.311 (2) or 409.313 are not satisfied before the earlier of: (a) The time the security interest would have become unperfected under the law of the other jurisdiction had the goods not become covered by a certificate of title from this state; or (b) The expiration of 4 months after the goods had become so covered. (6) CHANGE IN JURISDICTION OF BANK, ISSUER, NOMINATED PERSON, SECURITIES INTERMEDIARY, OR COMMODITY INTERMEDIARY. A security interest in deposit accounts, letter-of-credit
May 22, 2026, are designated by NOTES. (Published 5-22-26)
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rights, or investment property which is perfected under the law of the bank’s jurisdiction, the issuer’s jurisdiction, a nominated person’s jurisdiction, the securities intermediary’s jurisdiction, or the commodity intermediary’s jurisdiction, as applicable, remains perfected until the earlier of: (a) The time the security interest would have become unperfected under the law of that jurisdiction; or (b) The expiration of 4 months after a change of the applicable jurisdiction to another jurisdiction. (7) SUB. (6) SECURITY INTEREST PERFECTED OR UNPERFECTED UNDER LAW OF NEW JURISDICTION. If a security interest described in sub. (6) becomes perfected under the law of the other jurisdiction before the earlier of the time or the end of the period described in that subsection, it remains perfected thereafter. If the security interest does not become perfected under the law of the other jurisdiction before the earlier of that time or the end of that period, it becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value. (8) EFFECT ON FILED FINANCING STATEMENT OF CHANGE IN GOVERNING LAW. The following rules apply to collateral to which a security interest attaches within 4 months after the debtor changes its location to another jurisdiction: (a) A financing statement filed before the change pursuant to the law of the jurisdiction designated in s. 409.301 (1) or 409.305 (3) is effective to perfect a security interest in the collateral if the financing statement would have been effective to perfect a security interest in the collateral had the debtor not changed its location. (b) If a security interest perfected by a financing statement that is effective under par. (a) becomes perfected under the law of the other jurisdiction before the earlier of the time the financing statement would have become ineffective under the law of the jurisdiction designated in s. 409.301 (1) or 409.305 (3) or the expiration of the 4-month period, it remains perfected thereafter. If the security interest does not become perfected under the law of the other jurisdiction before the earlier time or event, it becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value. (9) EFFECT OF CHANGE IN GOVERNING LAW ON FINANCING STATEMENT FILED AGAINST ORIGINAL DEBTOR. If a financing statement naming an original debtor is filed pursuant to the law of the jurisdiction designated in s. 409.301 (1) or 409.305 (3) and the new debtor is located in another jurisdiction, the following rules apply: (a) The financing statement is effective to perfect a security interest in collateral acquired by the new debtor before, and within 4 months after, the new debtor becomes bound under s. 409.203 (4), if the financing statement would have been effective to perfect a security interest in the collateral had the collateral been acquired by the original debtor. (b) A security interest perfected by the financing statement and which becomes perfected under the law of the other jurisdiction before the earlier of the time the financing statement would have become ineffective under the law of the jurisdiction designated in s. 409.301 (1) or 409.305 (3) or the expiration of the 4month period remains perfected thereafter. A security interest that is perfected by the financing statement but which does not become perfected under the law of the other jurisdiction before the earlier time or event becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value. History: 2001 a. 10; 2011 a. 206. The four-month period for reperfection provided by sub. (1) (b) does not apply to titled goods due to the applicability of ss. 409.301 (1) and 409.303. In re Baker, 430 F.3d 858 (2005).
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409.317 Interests that take priority over or take free of security interest or agricultural lien. (1) CONFLICTING SECURITY INTERESTS AND RIGHTS OF LIEN CREDITORS. A security interest or agricultural lien is subordinate to the rights of: (a) A person entitled to priority under s. 409.322; and (b) Except as otherwise provided in sub. (5), a person that becomes a lien creditor before the earlier of the time: 1. The security interest or agricultural lien is perfected; or 2. One of the conditions specified in s. 409.203 (2) (c) is met and a financing statement covering the collateral is filed. (2) BUYERS THAT RECEIVE DELIVERY. Except as otherwise provided in sub. (5), a buyer, other than a secured party, of tangible chattel paper, tangible documents, goods, instruments, or a certificated security takes free of a security interest or agricultural lien if the buyer gives value and receives delivery of the collateral without knowledge of the security interest or agricultural lien and before it is perfected. (3) LESSEES THAT RECEIVE DELIVERY. Except as otherwise provided in sub. (5), a lessee of goods takes free of a security interest or agricultural lien if the lessee gives value and receives delivery of the collateral without knowledge of the security interest or agricultural lien and before it is perfected. (4) LICENSEES AND BUYERS OF CERTAIN COLLATERAL. A licensee of a general intangible or a buyer, other than a secured party, of collateral other than tangible chattel paper, tangible documents, goods, instruments, or a certificated security takes free of a security interest if the licensee or buyer gives value without knowledge of the security interest and before it is perfected. (5) PURCHASE-MONEY SECURITY INTEREST. Except as otherwise provided in ss. 409.320 and 409.321, if a person files a financing statement with respect to a purchase-money security interest before or within 20 days after the debtor receives delivery of the collateral, the security interest takes priority over the rights of a buyer, lessee, or lien creditor which arise between the time the security interest attaches and the time of filing. History: 2001 a. 10; 2009 a. 322; 2011 a. 206.
409.318 No interest retained in right to payment that is sold; rights and title of seller of account or chattel paper with respect to creditors and purchasers. (1) SELLER RETAINS NO INTEREST. A debtor that has sold an account, chattel paper, payment intangible, or promissory note does not retain a legal or equitable interest in the collateral sold. (2) DEEMED RIGHTS OF DEBTOR IF BUYER’S SECURITY INTEREST UNPERFECTED. For purposes of determining the rights of creditors of, and purchasers for value of an account or chattel paper from, a debtor that has sold an account or chattel paper, while the buyer’s security interest is unperfected, the debtor is deemed to have rights and title to the account or chattel paper identical to those the debtor sold. History: 2001 a. 10.
409.319 Rights and title of consignee with respect to creditors and purchasers. (1) CONSIGNEE HAS CONSIGNOR’S RIGHTS. Except as otherwise provided in sub. (2), for purposes of determining the rights of creditors of, and purchasers for value of goods from, a consignee, while the goods are in the possession of the consignee, the consignee is deemed to have rights and title to the goods identical to those the consignor had or had power to transfer. (2) APPLICABILITY OF OTHER LAW. For purposes of determining the rights of a creditor of a consignee, law other than this chapter determines the rights and title of a consignee while goods are in the consignee’s possession if, under this subchapter, a per-
May 22, 2026, are designated by NOTES. (Published 5-22-26)
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fected security interest held by the consignor would have priority over the rights of the creditor. History: 2001 a. 10.
409.320 Buyer of goods. (1) BUYER IN ORDINARY COURSE OF BUSINESS. Except as otherwise provided in sub. (5), a buyer in ordinary course of business, other than a person buying farm products from a person engaged in farming operations, takes free of a security interest created by the buyer’s seller, even if the security interest is perfected and the buyer knows of its existence. (2) BUYER OF CONSUMER GOODS. Except as otherwise provided in sub. (5), a buyer of goods from a person who used or bought the goods for use primarily for personal, family, or household purposes takes free of a security interest, even if perfected, if the buyer buys: (a) Without knowledge of the security interest; (b) For value; (c) Primarily for the buyer’s personal, family, or household purposes; and (d) Before the filing of a financing statement covering the goods. (3) EFFECTIVENESS OF FILING FOR SUB. (2). To the extent that it affects the priority of a security interest over a buyer of goods under sub. (2), the period of effectiveness of a filing made in the jurisdiction in which the seller is located is governed by s. 409.316 (1) and (2). (4) BUYER IN ORDINARY COURSE OF BUSINESS AT WELLHEAD OR MINEHEAD. A buyer in ordinary course of business buying oil, gas, or other minerals at the wellhead or minehead or after extraction takes free of an interest arising out of an encumbrance. (5) POSSESSORY SECURITY INTEREST NOT AFFECTED. Subsections (1) and (2) do not affect a security interest in goods in the possession of the secured party under s. 409.313. History: 2001 a. 10.
409.321 Licensee of general intangible and lessee of goods in ordinary course of business. (1) LICENSEE IN ORDINARY COURSE OF BUSINESS. In this section, “licensee in ordinary course of business” means a person that becomes a licensee of a general intangible in good faith, without knowledge that the license violates the rights of another person in the general intangible, and in the ordinary course from a person in the business of licensing general intangibles of that kind. A person becomes a licensee in the ordinary course if the license to the person comports with the usual or customary practices in the kind of business in which the licensor is engaged or with the licensor’s own usual or customary practices. (2) RIGHTS OF LICENSEE IN ORDINARY COURSE OF BUSINESS. A licensee in ordinary course of business takes its rights under a nonexclusive license free of a security interest in the general intangible created by the licensor, even if the security interest is perfected and the licensee knows of its existence. (3) RIGHTS OF LESSEE IN ORDINARY COURSE OF BUSINESS. A lessee in ordinary course of business takes its leasehold interest free of a security interest in the goods created by the lessor, even if the security interest is perfected and the lessee knows of its existence. History: 2001 a. 10.
409.322 Priorities among conflicting security interests in and agricultural liens on same collateral. (1) GENERAL PRIORITY RULES. Except as otherwise provided in this section, priority among conflicting security interests and agricultural liens in the same collateral is determined according to the following rules: (a) Conflicting perfected security interests and agricultural
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liens rank according to priority in time of filing or perfection. Priority dates from the earlier of the time a filing covering the collateral is first made or the security interest or agricultural lien is first perfected, if there is no period thereafter when there is neither filing nor perfection. (b) A perfected security interest or agricultural lien has priority over a conflicting unperfected security interest or agricultural lien. (c) The first security interest or agricultural lien to attach or become effective has priority if conflicting security interests and agricultural liens are unperfected. (2) TIME OF PERFECTION: PROCEEDS AND SUPPORTING OBLIGATIONS. For the purposes of sub. (1) (a): (a) The time of filing or perfection as to a security interest in collateral is also the time of filing or perfection as to a security interest in proceeds; and (b) The time of filing or perfection as to a security interest in collateral supported by a supporting obligation is also the time of filing or perfection as to a security interest in the supporting obligation. (3) SPECIAL PRIORITY RULES: PROCEEDS AND SUPPORTING OBLIGATIONS. Except as otherwise provided in sub. (6), a security interest in collateral which qualifies for priority over a conflicting security interest under s. 409.327, 409.328, 409.329, 409.330, or 409.331 also has priority over a conflicting security interest in: (a) Any supporting obligation for the collateral; and (b) Proceeds of the collateral if: 1. The security interest in proceeds is perfected; 2. The proceeds are cash proceeds or of the same type as the collateral; and 3. In the case of proceeds that are proceeds of proceeds, all intervening proceeds are cash proceeds, proceeds of the same type as the collateral, or an account relating to the collateral. (4) FIRST-TO-FILE PRIORITY RULE FOR CERTAIN COLLATERAL. Subject to sub. (5) and except as otherwise provided in sub. (6), if a security interest in chattel paper, deposit accounts, negotiable documents, instruments, investment property, or letter-of-credit rights is perfected by a method other than filing, conflicting perfected security interests in proceeds of the collateral rank according to priority in time of filing. (5) APPLICABILITY OF SUB. (4). Subsection (4) applies only if the proceeds of the collateral are not cash proceeds, chattel paper, negotiable documents, instruments, investment property, or letter-of-credit rights. (6) LIMITATIONS ON SUBS. (1) TO (5). Subsections (1) to (5) are subject to: (a) Subsection (7) and the other provisions of this subchapter; (b) Section 404.210 with respect to a security interest of a collecting bank; (c) Section 405.118 with respect to a security interest of an issuer or nominated person; and (d) Section 409.110 with respect to a security interest arising under ch. 402 or 411. (7) PRIORITY UNDER AGRICULTURAL LIEN STATUTE. A perfected agricultural lien on collateral has priority over a conflicting security interest in or agricultural lien on the same collateral if the statute creating the agricultural lien so provides. History: 2001 a. 10. A bank with a security interest perfected by filing financing statements had priority over a chattel mortgage that was filed almost two years after the bank filed its financing statements, even though the bank subsequently refiled a financing statement. Burlington National Bank v. Strauss, 50 Wis. 2d 270, 184 N.W.2d 122 (1971). A seller of goods on credit must perfect its claim to priority by filing the agree-
May 22, 2026, are designated by NOTES. (Published 5-22-26)
409.322
UCC — SECURED TRANSACTIONS
ment and financing statements. House of Stainless, Inc. v. Marshall & Ilsley Bank, 75 Wis. 2d 264, 249 N.W.2d 561 (1977). A lien creditor has priority over an unperfected security interest. Whether the lien creditor has knowledge of the security is immaterial. Muggli Dental Studio v. Taylor, 142 Wis. 2d 696, 419 N.W.2d 322 (Ct. App. 1987). NOTE: The above annotations cite to the pre-2001 Wis. Act 10 version of this chapter.
409.323 Future advances. (1) WHEN PRIORITY BASED ON TIME OF ADVANCE. Except as otherwise provided in sub. (3), for purposes of determining the priority of a perfected security interest under s. 409.322 (1) (a), perfection of the security interest dates from the time an advance is made to the extent that the security interest secures an advance that: (a) Is made while the security interest is perfected only: 1. Under s. 409.309 when it attaches; or 2. Temporarily under s. 409.312 (5), (6), or (7); and (b) Is not made pursuant to a commitment entered into before or while the security interest is perfected by a method other than under s. 409.309 or 409.312 (5), (6), or (7). (2) LIEN CREDITOR. Except as otherwise provided in sub. (3), a security interest is subordinate to the rights of a person that becomes a lien creditor to the extent that the security interest secures an advance made more than 45 days after the person becomes a lien creditor unless the advance is made: (a) Without knowledge of the lien; or (b) Pursuant to a commitment entered into without knowledge of the lien. (3) BUYER OF RECEIVABLES. Subsections (1) and (2) do not apply to a security interest held by a secured party that is a buyer of accounts, chattel paper, payment intangibles, or promissory notes or a consignor. (4) BUYER OF GOODS. Except as otherwise provided in sub. (5), a buyer of goods other than a buyer in ordinary course of business takes free of a security interest to the extent that it secures advances made after the earlier of: (a) The time the secured party acquires knowledge of the buyer’s purchase; or (b) Forty-five days after the purchase. (5) ADVANCES MADE PURSUANT TO COMMITMENT: PRIORITY OF BUYER OF GOODS. Subsection (4) does not apply if the advance is made pursuant to a commitment entered into without knowledge of the buyer’s purchase and before the expiration of the 45-day period. (6) LESSEE OF GOODS. Except as otherwise provided in sub. (7), a lessee of goods, other than a lessee in ordinary course of business, takes the leasehold interest free of a security interest to the extent that it secures advances made after the earlier of: (a) The time the secured party acquires knowledge of the lease; or (b) Forty-five days after the lease contract becomes enforceable. (7) ADVANCES MADE PURSUANT TO COMMITMENT: PRIORITY OF LESSEE OF GOODS. Subsection (6) does not apply if the advance is made pursuant to a commitment entered into without knowledge of the lease and before the expiration of the 45-day period. History: 2001 a. 10.
409.324 Priority of purchase-money security interests. (1) GENERAL RULE: PURCHASE-MONEY PRIORITY. Except as otherwise provided in sub. (7), a perfected purchasemoney security interest in goods other than inventory or livestock has priority over a conflicting security interest in the same goods, and, except as otherwise provided in s. 409.327, a perfected security interest in its identifiable proceeds also has priority, if the
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purchase-money security interest is perfected when the debtor receives possession of the collateral or within 20 days thereafter. (2) INVENTORY PURCHASE-MONEY PRIORITY. Subject to sub. (3) and except as otherwise provided in sub. (7), a perfected purchase-money security interest in inventory has priority over a conflicting security interest in the same inventory, has priority over a conflicting security interest in chattel paper or an instrument constituting proceeds of the inventory and in proceeds of the chattel paper, if so provided in s. 409.330, and, except as otherwise provided in s. 409.327, also has priority in identifiable cash proceeds of the inventory to the extent that the identifiable cash proceeds are received on or before the delivery of the inventory to a buyer, if: (a) The purchase-money security interest is perfected when the debtor receives possession of the inventory; (b) The purchase-money secured party sends an authenticated notification to the holder of the conflicting security interest; (c) The holder of the conflicting security interest receives the notification within 5 years before the debtor receives possession of the inventory; and (d) The notification states that the person sending the notification has or expects to acquire a purchase-money security interest in inventory of the debtor and describes the inventory. (3) HOLDERS OF CONFLICTING INVENTORY SECURITY INTERESTS TO BE NOTIFIED. Subsection (2) (b) to (d) applies only if the holder of the conflicting security interest had filed a financing statement covering the same types of inventory: (a) If the purchase-money security interest is perfected by filing, before the date of the filing; or (b) If the purchase-money security interest is temporarily perfected without filing or possession under s. 409.312 (6), before the beginning of the 20-day period thereunder. (4) LIVESTOCK PURCHASE-MONEY PRIORITY. Subject to sub. (5) and except as otherwise provided in sub. (7), a perfected purchase-money security interest in livestock that are farm products has priority over a conflicting security interest in the same livestock, and, except as otherwise provided in s. 409.327, a perfected security interest in their identifiable proceeds and identifiable products in their unmanufactured states also has priority, if: (a) The purchase-money security interest is perfected when the debtor receives possession of the livestock; (b) The purchase-money secured party sends an authenticated notification to the holder of the conflicting security interest; (c) The holder of the conflicting security interest receives the notification within 6 months before the debtor receives possession of the livestock; and (d) The notification states that the person sending the notification has or expects to acquire a purchase-money security interest in livestock of the debtor and describes the livestock. (5) HOLDERS OF CONFLICTING LIVESTOCK SECURITY INTERESTS TO BE NOTIFIED. Subsection (4) (b) to (d) applies only if the holder of the conflicting security interest had filed a financing statement covering the same types of livestock: (a) If the purchase-money security interest is perfected by filing, before the date of the filing; or (b) If the purchase-money security interest is temporarily perfected without filing or possession under s. 409.312 (6), before the beginning of the 20-day period thereunder. (6) SOFTWARE PURCHASE-MONEY PRIORITY. Except as otherwise provided in sub. (7), a perfected purchase-money security interest in software has priority over a conflicting security interest in the same collateral, and, except as otherwise provided in s. 409.327, a perfected security interest in its identifiable proceeds also has priority, to the extent that the purchase-money security
May 22, 2026, are designated by NOTES. (Published 5-22-26)
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interest in the goods in which the software was acquired for use has priority in the goods and proceeds of the goods under this section. (7) CONFLICTING PURCHASE-MONEY SECURITY INTERESTS. If more than one security interest qualifies for priority in the same collateral under sub. (1), (2), (4), or (6): (a) A security interest securing an obligation incurred as all or part of the price of the collateral has priority over a security interest securing an obligation incurred for value given to enable the debtor to acquire rights in or the use of collateral; and (b) In all other cases, s. 409.322 (1) applies to the qualifying security interests. History: 2001 a. 10.
409.3245 Priority of production-money security interests and agricultural liens. (1) Except as otherwise provided in subs. (3), (4), and (5), if the requirements of sub. (2) are satisfied, a perfected production-money security interest in production-money crops has priority over a conflicting security interest in the same crops to the extent of the production-money obligation secured by the production-money security interest and, except as otherwise provided in s. 409.327, also has priority in their identifiable proceeds. (2) A production-money security interest has priority under sub. (1) if: (a) The production-money security interest is perfected by filing when the production-money secured party first gives new value to enable the debtor to produce the crops; (b) The production-money secured party sends an authenticated notification by certified mail to the holder of the conflicting security interest not less than 20 or more than 30 days before the production-money secured party first gives new value to enable the debtor to produce the crops if the holder had filed a financing statement covering the crops before the date of the filing made by the production-money secured party; and (c) The notification states that the production-money secured party has or expects to acquire a production-money security interest in the debtor’s crops and provides a description of the crops, the name and mailing address of the production-money secured party giving the notice, the name and mailing address of the debtor, the name and mailing address of the lender to whom notice is being sent, the date on which the transaction would take place, and the maximum amount of new value to be provided. (3) Except as otherwise provided in sub. (4) or (5), if more than one security interest qualifies for priority in the same collateral under sub. (1), the security interests rank according to priority in time of filing under s. 409.322 (1). (4) To the extent that a person holding a perfected security interest in production-money crops that are the subject of a production-money security interest gives new value to enable the debtor to produce the production-money crops and the value is in fact used for the production of the production-money crops, the security interests rank according to priority in time of filing under s. 409.322 (1). (5) To the extent that a person holds both an agricultural lien and a production-money security interest in the same collateral securing the same obligations, the rules of priority applicable to agricultural liens govern priority. History: 2001 a. 10.
409.325 Priority of security interests in transferred collateral. (1) SUBORDINATION OF SECURITY INTEREST IN TRANSFERRED COLLATERAL. Except as otherwise provided in sub. (2), a security interest created by a debtor is subordinate to a security interest in the same collateral created by another person if:
UCC — SECURED TRANSACTIONS
409.328
(a) The debtor acquired the collateral subject to the security interest created by the other person; (b) The security interest created by the other person was perfected when the debtor acquired the collateral; and (c) There is no period thereafter when the security interest is unperfected. (2) LIMITATION OF SUB. (1) SUBORDINATION. Subsection (1) subordinates a security interest only if the security interest: (a) Otherwise would have priority solely under s. 409.322 (1) or 409.324; or (b) Arose solely under s. 402.711 (3) or 411.508 (5). History: 2001 a. 10.
409.326 Priority of security interests created by new debtor. (1) SUBORDINATION OF SECURITY INTEREST CREATED BY NEW DEBTOR. Subject to sub. (2), a security interest that is created by a new debtor in collateral in which the new debtor has or acquires rights and is perfected solely by a filed financing statement that would be ineffective to perfect the security interest but for the application of s. 409.316 (9) (a) or 409.508 is subordinate to a security interest in the same collateral which is perfected other than by such a filed financing statement. (2) PRIORITY UNDER OTHER PROVISIONS; MULTIPLE ORIGINAL DEBTORS. The other provisions of this subchapter determine the priority among conflicting security interests in the same collateral perfected by filed financing statements described in sub. (1). However, if the security agreements to which a new debtor became bound as debtor were not entered into by the same original debtor, the conflicting security interests rank according to priority in time of the new debtor’s having become bound. History: 2001 a. 10; 2011 a. 206.
409.327 Priority of security interests in deposit account. The following rules govern priority among conflicting security interests in the same deposit account: (1) CONTROL BY SECURED PARTY. A security interest held by a secured party having control of the deposit account under s. 409.104 has priority over a conflicting security interest held by a secured party that does not have control. (2) PRIORITY IN TIME OF CONTROL. Except as otherwise provided in subs. (3) and (4), security interests perfected by control under s. 409.314 rank according to priority in time of obtaining control. (3) PRIORITY OF BANK REGARDING DEPOSIT ACCOUNT. Except as otherwise provided in sub. (4), a security interest held by the bank with which the deposit account is maintained has priority over a conflicting security interest held by another secured party. (4) PRIORITY OVER BANK REGARDING DEPOSIT ACCOUNT. A security interest perfected by control under s. 409.104 (1) (c) has priority over a security interest held by the bank with which the deposit account is maintained. History: 2001 a. 10.