Vohs v. Donovan

Court of Appeals of Wisconsin
777 N.W.2d 915, 322 Wis. 2d 721, 2009 WI App 181 (2009)

ELI5:

Rule of Law:

A contract contingency clause that appears indefinite, such as being subject to a party 'obtaining a home of their choice,' can be rendered sufficiently definite and the promise non-illusory if extrinsic evidence of surrounding circumstances, particularly a very short time limit, suggests the parties understood it to refer to a specific, pending transaction.

Facts:

Terry and Vicki Vohs had a pending counteroffer to purchase another home, which required acceptance by February 19, 2007.
On February 18, 2007, Paul and Teresa Donovan offered to buy the Vohs' home.
The Donovans' offer included the contingency: 'offer is subject to sellers obtaining home of their choice on or before Feb. 20, 2007,' a two-day window.
The Vohses accepted the Donovans' offer on the same day, February 18.
On February 19, the Vohses' counteroffer on the other home was accepted, satisfying the contingency in their contract with the Donovans.
The Vohses' broker communicated to the Donovans that the contingency was fulfilled.
The Donovans subsequently refused to complete the purchase of the Vohs' home.

Procedural Posture:

Terry and Vicki Vohs (sellers) filed a lawsuit against Paul and Teresa Donovan (buyers) in the circuit court (trial court) for breach of contract.
The Donovans filed a motion for summary judgment, arguing the contract was unenforceable because the contingency was indefinite and illusory.
The circuit court granted summary judgment in favor of the Donovans.
The Vohses (appellants) appealed the circuit court's decision to the Court of Appeals of Wisconsin (intermediate appellate court).

Premium Content

Subscribe to Lexplug to view the complete brief

You're viewing a preview with Rule of Law, Facts, and Procedural Posture

Issue:

Does a real estate purchase contract contingency, stating the offer is 'subject to sellers obtaining home of their choice on or before' a specific near-term date, render the contract unenforceable for being indefinite or the sellers' promise illusory?

Opinions:

Majority - Vergeront, J.

No. The contingency clause does not necessarily render the contract unenforceable for indefiniteness or illusoriness. When evaluating whether a contract term is indefinite, a court must examine both the wording of the contract and the surrounding circumstances to determine if there was mutual assent to a sufficiently definite meaning. Here, the extremely short two-day time limit for the contingency strongly implies that the parties contemplated a specific, ongoing transaction rather than a general search for a new home. The extrinsic evidence of the Vohses' pending counteroffer, which was due to be accepted or rejected within that timeframe, provides definiteness to the phrases 'home of their choice' and 'obtaining.' A promise is illusory if its fulfillment is wholly within the promisor's control. In this case, the contingency depended on a third party's acceptance of the Vohses' counteroffer, meaning its fulfillment was not wholly within the Vohses' control. Therefore, their promise to sell was not illusory.

Analysis:

This decision reinforces the principle that courts should endeavor to enforce contracts by looking to the parties' objective intent, as evidenced by surrounding circumstances, rather than invalidating them based on seemingly vague language. It highlights the importance of context, showing how a tight deadline can serve as powerful evidence that a general phrase like 'home of their choice' referred to a specific, understood event. The case also clarifies the distinction between fatal indefiniteness and resolvable ambiguity, and it confirms that a condition dependent on a third party's action does not make a promise illusory, thus preserving the mutuality of obligation.

Gunnerbot

AI-powered case assistant

Loaded: Vohs v. Donovan (2009)

Try: "What was the holding?" or "Explain the dissent"