SB 480

Article 7 of the Uniform Commercial Code (UCC) regulates the transfer of goods

in interstate commerce, specifically dealing with the transfer of title to goods that are

moved or shipped from one location to another. Wisconsin had earlier enacted article

7 of the UCC, but in 2003 the National Conference of Commissioners on Uniform

State Laws adopted a revised version of article 7 of the UCC and recommended its

enactment in all of the states. This bill enacts the revised version of article 7 of the

UCC into Wisconsin law.

The transfer of goods in interstate commerce involves not only the shipment

and storage of tangible goods, but also the transfer of the ownership rights to those

goods. Under current law, such rights are transferred by specific documents of title.

These title documents are paper documents, consisting of originals and copies, and

may be either negotiable or nonnegotiable. The use of paper documents to transfer

title and other ownership rights has worked well in the past, but as commercial

transactions in the United States and around the world are increasingly conducted

and facilitated through electronic means the current-law requirements for paper

documents may now impede the transfer of title to goods that are moved or shipped

from one location to another. Revised article 7 of the UCC addresses this issue by

permitting electronic documents of title for the transfer of goods in interstate

commerce.

Under the bill, article 7 of the UCC is revised to provide that a lawful document

of title includes an electronic document of title, which is evidenced by a record

consisting of information stored in an electronic medium. Under the bill, for the

purpose of transferring ownership rights in tangible goods, electronic documents of

title are the legal equivalent of paper documents of title. The remaining portions of

current law relating to article 7 of the UCC are amended to facilitate the use of either

electronic documents of title or the current paper documents of title. Most

importantly, revised article 7 of the UCC, as contained in the bill, creates new

definitions of "record" and "sign." Under the bill, a record is "information that is

inscribed on a tangible medium or that is stored in an electronic or other medium and

is retrievable in perceivable form." The term "sign" is defined to mean "to execute or

adopt a tangible symbol" and "to attach or logically associate with the record an

electronic sound, symbol, or process." Wherever the term "writing" or an equivalent

was previously used in article 7 of the UCC, the term "record" is uniformly used in

revised article 7 of the UCC. When a document is required to be signed under article

7 of the UCC, electronic signing satisfies the requirement under revised article 7 of

the UCC.

Finally, the bill incorporates all technical or nonsubstantive portions of revised

article 7 of the UCC that update or clarify the earlier version of article 7 of the UCC,

as well as eliminates provisions that no longer have legal effect.