Legal Memorandum: Enforceable Contracts in WI

Issue: Under Wisconsin law, when does a contract become enforceable?

A contract is only enforceable if its terms are “so definite” that the “promises and performances to be rendered by each party are reasonably certain.”  See Goebel v. Nat’l Exchangors, Inc., 88 Wis. 2d 596, 615, 277 N.W.2d 755 (1979) (citations omitted).  “As a matter of law a negotiation looking toward a definitive contract leaves the parties unbound until the closing.”  Skycom Corp. v. Telstar Corp., 813 F.2d 810, 815 (7th Cir. 1987) (applying Wisconsin law).

Where at the time of the alleged agreement, “the essential details of the parties’ co-ownership arrangement had not been agreed upon” the parties have no more than an “agreement to agree at a future time.”  See Hellenbrand v. Goodman, 2003 Wis. App. 162, ¶ 25 (Wis. Ct. App. 2003) (unpublished).  Such an agreement is too vague to create an enforceable contract because the minds of the parties have not met on essential terms, and such an agreement ‘”amounts to nothing.'”  See id.  (citing Dunlop v. Laitsch, 16 Wis. 2d 36, 42, 113 N.W.2d 551 (1962)).

In short, where essential details of the parties’ co-ownership arrangement had not been agreed upon, the parties have no more than an “agreement to agree at a future time.”  See Hellenbrand v. Goodman, 2003 Wis. App. 162, ¶ 25 (Wis. Ct. App. 2003).

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