Wis. Stat. § 409.401

Current through Acts 2023-2024, ch. 272

Section 409.401 - Alienability of debtor's rights

(1) OTHER LAW GOVERNS ALIENABILITY; EXCEPTIONS. Except as otherwise provided in sub. (2) and ss. 409.406 , 409.407 , 409.408 , and 409.409 , whether a debtor's rights in collateral may be voluntarily or involuntarily transferred is governed by law other than this chapter.

(2) AGREEMENT DOES NOT PREVENT TRANSFER. An agreement between the debtor and secured party which prohibits a transfer of the debtor's rights in collateral or makes the transfer a default does not prevent the transfer from taking effect.

Wis. Stat. § 409.401

2001 a. 10.

The above annotated materials cite to the pre-2001 Wis. Act 10 version of ch. 409.

If a security agreement does not explicitly provide that transfer of collateral constitutes default and the secured party is not entitled to immediate possession, sale of collateral is not a conversion. Production Credit Association of Chippewa Falls v. Equity Coop Livestock, 82 Wis. 2d 5, 261 N.W.2d 127 (1978). 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 AssociatIon of Madison v. Nowatzski, 90 Wis. 2d 344, 280 N.W.2d 118 (1979).