Wis. Stat. § 402.719

Current through Acts 2023-2024, ch. 272

Section 402.719 - Contractual modification or limitation of remedy

(1) Subject to subs. (2) and (3) and to s. 402.718 on liquidation and limitation of damages:

(a) The agreement may provide for remedies in addition to or in substitution for those provided in this chapter and may limit or alter the measure of damages recoverable under this chapter, as by limiting the buyer's remedies to return of the goods and repayment of the price or to repair and replacement of nonconforming goods or parts; and

(b) Resort to a remedy as provided is optional unless the remedy is expressly agreed to be exclusive, in which case it is the sole remedy.

(2) Where circumstances cause an exclusive or limited remedy to fail of its essential purpose, remedy may be had as provided in chs. 401 to 411.

(3) Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable. Limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable but limitation of damages where the loss is commercial is not.

Wis. Stat. § 402.719

1979 c. 89; 1991 a. 148, 304, 315.

A commercial contract clause that limited consequential damages was unconscionable. Trinkle v. Schumacher Co., 100 Wis. 2d 13, 301 N.W.2d 255 (Ct. App. 1980). The remedy under sub. (2) was proper when a damage clause provided damages that were, under the circumstances, unconscionably low. Phillips Petroleum v. Bucyrus-Erie Co., 131 Wis. 2d 21, 388 N.W.2d 584 (1986). A purchaser cannot claim that a warranty provision has failed of its essential purpose merely because a potential claim did not arise until after the warranty period had expired. Wisconsin Power & Light v. Westinghouse Elec., 830 F.2d 1405 (1987). In interpreting subs. (2) and (3), the Wisconsin Supreme Court has adopted the "dependent approach." Under the dependent approach, if a litigant proves a limited remedy fails of its essential purpose under sub. (2), any accompanying consequential damages disclaimer is per se unconscionable under sub. (3). Sanchelima International, Inc. v. Walker Stainless Equipment Co., 920 F.3d 1141 (2019). A damage disclaimer is not enforceable if the remaining exclusive remedy fails of its essential purpose. Rich Products Corp. v. Kemutec, Inc., 66 F. Supp. 2d 937 (1999).