Words that promise nothing

An illusory promise consists of “words in promissory form that promise nothing.”1

Properly written contingencies are specific, and mostly not all that complicated. I think we make the task more difficult than need be by overthinking and overwriting.  A proper contingency includes a promise that a maker gives which subjects him or her to to a detriment or restriction. 2  Real estate licensees are permitted to complete Offers in Wisconsin, provided we as a whole are doing so competently.   

The competency requirement is not to be interpreted as “pretty good” or “close enough” or “mostly correct”.  In fact an entire agreement can be deemed a non-contract by a judge for including one clause found to be an illusory promise.  The Court of Appeals decision I  referenced includes this quote from the CORBIN publication: “I promise to do as you ask if I please to do so when the time arrives.”

To be an effective contract drafter, it helps to read contracts and contingencies written by the WRA attorneys. (Suggestion: don’t confuse yourself by repeating contingencies written by other licensees—passing on bad form from one of us to the next sets us back when our objective is to go forward.)

When you reach the point that you accurately anticipate how promises by one party to do something by a certain time, and the results meet a defined standard, with consequences to the promisor, you’ve got it. I’ve seen a smart numbers person struggle to learn stats, I  understand smart real estate people may struggle to get good at contingencies.  But I think we can do it with some practice and reading. Pick up a copy of the Real Estate Clause book from the WRA. It’s a terrific guide and may even include the promise wording you need. 

1) 2 Joseph M Perillo and Helen Hadjiyannakis Bender, Corbin on Contracts. (Rev edition 1995) 

2) Court of Appeals decision dated and filed 5/7/08 appeal No. 2007AP812

Author: Tom Meyer, Owner-Broker, Essential Real Estate, LLC Madison, WI

The real estate transaction, disclosure, and confidentiality are the business of a Wisconsin licensee. It's in the transaction where the skill of the licensee, and their commitment to the law where the public is protected or placed at risk. What you see REALTORS do to brand themselves and their firms, promote their service, advertise, and process paper do not require a license. I believe negotiations to create and honor a real estate purchase agreement is where the agent has the greatest value in a transaction. Paying professional fee rates for the administrative services is a choice consumers deserve. Old business model driven commission rates are taxing the home equity of American home sellers. Essential Real Estate was created to put more money in the hands of the consumer by eliminating expenses for the firm and charging a fair price for the real real estate service.

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