The Trusted Adviser June 2010 | Volume 3 • Number 6




Vohs v Donovan, 2009 AP 507 (Wis Ct App, 2009).

Facts:On February 18, 2007, the Donovans signed an offer to purchase a home from the Vohses. The offer included the following contingency: "the offer is subject to sellers obtaining a home of their choice on or before Feb. 20, 2007." The Vohses accepted an offer to purchase a new home the next day, February 19. Subsequently, the Donovans failed to purchase the Vohses' home and the Vohses sold it to another purchaser for less money. The Vohses sued the Donovans for breach of contract; the Donovans filed a motion for summary judgment asserting that the contingency language in the offer made it illusory and unenforceable. The trial court granted the Donovans' motion and the Vohses appealed.

Holding:Reversed and remanded. For a contractual term to be definite there must be mutual assent between the parties. The court determines whether there is mutual assent based on an objective standard. Whether a term in a contract is an illusory promise is a separate issue determined by whether the promise is "left wholly to [their] own will and discretion." To enforce a term in a contract, the court must first determine if the term is definite, then determine if it is illusory.

The court found the term sufficiently definite, because the Donovans understood the term was meant to ensure that the Vohses successfully obtained their new home before selling their current one. Although the word "obtain" is ambiguous and the phrase "home of their choice" is indefinite, the court nevertheless found it a reasonable inference that the Donovans knew of the Vohses' actual pending transaction for the new home.

The court also found that the term was not illusory. Based on the extrinsic evidence of the Vohses' pending transaction for a new home, which they accepted on February 19, the Vohses did not exercise such total discretion over the contractual condition to render it illusory.






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