Case Title: Metropolitan Ventures, LLC v. GEA Associates

Citation: 2006 WI 71

Docket Number: 

State: wisconsin

Court: Wisconsin Supreme Court

Date: 2006-06-14T00:00:00Z

Document:
2006 WI 71 
 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2003AP1806 
COMPLETE TITLE: 
 
 
Metropolitan Ventures, LLC, a Wisconsin  
limited liability company,  
          Plaintiff-Appellant, 
     v. 
GEA Associates, a Wisconsin limited  
partnership, Elizabeth Levins, and  
Margaret Reuss, as Trustee of the Henry  
S. Reuss Trust,  
          Defendants-Respondents-Petitioners. 
 
 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
2004 WI App 189 
Reported at:  276 Wis. 2d 625, 688 N.W.2d 722 
(Ct. App. 2004-Published) 
 
 
OPINION FILED: 
June 14, 2006   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
October 11, 2005   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
Milwaukee   
 
JUDGE: 
Jeffrey A. Kremers   
 
 
 
JUSTICES: 
 
 
CONCURRED: 
ABRAHAMSON, C.J., concurs in part (opinion 
filed). 
ROGGENSACK, J., joins the concurrence.   
 
DISSENTED: 
        
 
NOT PARTICIPATING: WILCOX, J., did not participate.   
 
 
 
ATTORNEYS: 
 
For 
the 
defendants-respondents-petitioners 
there 
were 
briefs by Charles H. Barr and Croen & Barr LLP, Milwaukee, and 
oral argument by Charles H. Barr. 
 
For the plaintiff-appellant there was a brief by William M. 
Cannon, Charles David Schmidt and Cannon & Dunphy, S.C., 
Brookfield, and oral argument by Charles David Schmidt. 
 
 
 
2006 WI 71
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  2003AP1806  
(L.C. No. 
2002CV9109) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Metropolitan Ventures, LLC, a Wisconsin limited  
liability company, 
 
          Plaintiff-Appellant, 
 
     v. 
 
GEA Associates, a Wisconsin limited 
partnership, Elizabeth Levins, and Margaret 
Reuss, as Trustee of the Henry S. Reuss Trust, 
 
          Defendants-Respondents-Petitioners. 
 
 
 
FILED 
 
JUN 14, 2006 
 
Cornelia G. Clark 
Clerk of Supreme Court 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Affirmed and 
remanded.   
 
¶1 
LOUIS B. BUTLER, JR., J.  Metropolitan Ventures, LLC 
("Metropolitan") seeks review of a decision by the court of 
appeals reversing and remanding the circuit court's grant of 
summary judgment in favor of GEA.  Metropolitan Ventures v. GEA 
Assocs., 2004 WI App 189, 276 Wis. 2d 625, 688 N.W.2d 722. 
¶2 
At 
issue 
in 
this 
case 
is 
a 
contract 
between 
Metropolitan and GEA Associates ("GEA"), a limited partnership, 
No. 
2003AP1806   
 
2 
 
for the sale and purchase by Metropolitan of the GEA partnership 
as well as a building owned by the partnership.  GEA asserts 
that the contract was unenforceable because the financing terms 
rendered the contract indefinite and illusory. 
¶3 
The circuit court for Milwaukee County, Honorable 
Jeffrey A. Kremers, granted GEA's motion for summary judgment 
and dismissed the case.  The circuit court found that no 
contract existed due to the lack of sufficient definiteness in 
the financing contingency provision.  Metropolitan appealed.  
The court of appeals reversed and remanded, concluding that the 
financing contingency did not render the contract illusory, but 
that there existed an issue of material fact as to whether GEA 
waived the financing contingency.  Metropolitan asks this court 
to affirm part of the court of appeals' decision, reverse part 
of the court of appeals' decision, and remand the case for 
further proceedings. 
¶4 
Upon review, we find that the parties' subsequent 
actions clearly demonstrate their earlier intent to contract for 
the sale and purchase of GEA.   We therefore conclude that the 
contract at issue is not indefinite and is enforceable.  
However, we find that genuine issues of material fact exist as 
to whether representatives of GEA complied with their duty of 
good faith owed to Metropolitan, and whether GEA used its "best 
efforts" to ensure that GEA did not dispose of its assets or 
otherwise violate the terms and conditions of the "Limited 
Partnership Purchase Agreement" ("LPPA"). We therefore affirm 
the court of appeals' reversal on other grounds, and remand this 
No. 
2003AP1806   
 
3 
 
matter to the circuit court for further proceedings consistent 
with this opinion. 
I 
¶5 
Metropolitan is a business engaged in real estate 
investment and development.  GEA is a limited partnership that 
was established to preserve and renovate the German English 
Academy Building, located in Milwaukee, Wisconsin.  On March 19, 
2002, Metropolitan and GEA entered into the LPPA, whereby 
Metropolitan agreed to purchase all of the general partnership 
interests and certain limited partnership interests of GEA.1  The 
LPPA was negotiated between Elizabeth Levins, managing partner 
of GEA,2 and Daniel B. Genzel, Metropolitan's managing partner.  
Levins was a licensed broker and the LPPA included a 6 percent 
brokerage fee, divided evenly between Levins and MLG Commercial 
LLC.  
                                                 
1 This contract was the second contract between Metropolitan 
and GEA.  On November 8, 2001, Metropolitan and GEA entered into 
an agreement for Metropolitan to purchase the building owned by 
GEA ("Building Contract"). That Building Contract included a 
provision requiring approval of the sale by the owners of at 
least two-thirds of the limited partnership units in GEA.    
Within two weeks, nearly every limited partner had approved the 
sale to Metropolitan.  On November 28, 2001, Levins wrote to 
Metropolitan and waived the two-thirds limited partnership 
approval contingency.  However, on January 7, 2002, Metropolitan 
canceled the November Building Contract. The second LPPA also 
required two-thirds limited partnership approval. 
2 Elizabeth Levins was a registered agent and the general 
partner in charge of GEA's day-to-day activities.  Henry S. 
Reuss was also a general partner of GEA until his death on 
January 12, 2002.  The Reuss Trust did not take an active part 
in managing GEA.  According to the record, at the time GEA 
entered into the LPPA, the Reuss Trust held 40.94 percent 
interest in GEA and Levins held 5.51 percent interest in GEA.   
No. 
2003AP1806   
 
4 
 
¶6 
Under the LPPA, Metropolitan was required to obtain 
unconditional financing equal to 85 percent of the purchase 
price "on terms satisfactory to Buyer . . . ."  GEA was required 
to deliver to Metropolitan assignments of at least 66 2/3 
percent 
of 
the 
outstanding 
units 
owned 
by 
the 
limited 
partnership ("Assignment Agreements").  GEA agreed to "use its 
reasonable best efforts to obtain Assignment Agreements from all 
the limited partners" by recommending to each limited partner 
that they participate in the sale and requesting the limited 
partners execute an assignment of their partnership interest(s).  
GEA was further obligated to use its best efforts to ensure that 
the Partnership did not "[s]ell or dispose of any asset . . . of 
the partnership."   
¶7 
On April 17, 2002, Daniel Genzel sent a letter to 
Elizabeth Levins requesting certain documents from GEA that were 
required for Metropolitan to complete the financing application.  
Metropolitan's letter further asked for an extension of the 
financing contingency until April 25, 2002.  Levins forwarded 
the requested documents and granted the extension. 
¶8 
On April 25, 2002, Genzel sent a letter to Levins 
indicating that Metropolitan had received a satisfactory loan 
commitment from Anchor Bank and that Metropolitan continued to 
look forward to closing the transaction.3   
                                                 
3 The court of appeals remanded the case to determine 
whether this letter constituted a proper waiver of the financing 
contingency.  Because we find that Genzel's letter constituted 
timely waiver of the financing contingency, we do not remand 
this case to the trial court to address that issue. 
No. 
2003AP1806   
 
5 
 
¶9 
On April 29, 2002, Levins sent a letter to GEA's 
limited partners explaining the details of the LPPA agreement 
and recommending the limited partners sell to Metropolitan their 
interest in GEA.  The letter stated, in pertinent part: 
The general partners [of GEA] have agreed to sell 
their interests, and the only contingency remaining is 
acceptance of Metropolitan's offer by two thirds of 
the limited partners.  Because of our last experience 
with Metropolitan,4 we chose to wait until all of 
[Metropolitan's] other contingencies were satisfied 
before recommending this transaction to our limited 
partners.  (Emphasis added.) 
¶10 Levins' April 29 letter asked the limited partners to 
reply by May 15, 2002.  However, on May 8, 2002, GEA received an 
offer to purchase from a second party, Steadfast Capital, L.L.C. 
("Steadfast").5  Levins rejected the May 8 Steadfast offer and 
counter-offered on May 10.  Steadfast accepted GEA's May 10 
counter-offer.  GEA's agreement with Steadfast constituted a 
secondary offer and would therefore not become effective unless 
and until the existing LPPA was terminated.  Steadfast agreed to 
purchase GEA for $3,750,000, a higher sale price as compared to 
the Metropolitan offer, $3,255,000.  Steadfast also agreed to 
pay a brokerage fee of 7 percent, evenly divided between Levins 
and MLG Commercial LLC.   
¶11 GEA contends that prior to the May 10 agreement with 
Steadfast, GEA had not received responses from all the limited 
                                                 
4 Metropolitan withdrew its first offer to purchase the real 
estate from GEA.  See supra note 1. 
5 The parties dispute whether Levins solicited Steadfast for 
this offer.   
No. 
2003AP1806   
 
6 
 
partners regarding the sale to Metropolitan.  On May 10, 2002, 
Levins sent a letter to GEA's limited partners informing them 
that GEA had "received an unsolicited secondary offer [from 
Steadfast] to purchase the partnership real estate at a price 
that significantly exceed[ed] the base purchase price to be paid 
under the pending contract with Metropolitan Ventures, LLC."  
Levins' letter further informed the limited partners that they 
were not bound to sell to Metropolitan and that GEA's agreement 
with Metropolitan would terminate if two-thirds of the limited 
partners did not agree to the sale to Metropolitan.  The letter 
gave the limited partners who had already agreed to sell to 
Metropolitan the opportunity to revoke that decision. 
¶12 The letter stated, in pertinent part: 
As we have told you, the transaction with Metropolitan 
involves 
the 
purchase 
and 
sale 
of 
partnership 
interests (rather than the real estate itself), and 
the limited partners are not contractually bound to 
sell to Metropolitan.   
. . . .  
The agreement with Metropolitan requires the general 
partners 
to recommend 
that all 
limited 
partners 
participate in the sale to Metropolitan.  We have done 
so.  However, as fiduciaries, we are also obligated to 
advise you of the terms and conditions of the 
Steadfast Offer, so that you know all the facts before 
making your decision.   
. . . .  
If you decide to sell your partnership interest to 
Metropolitan, you must sign and return the Assignment 
form (previously provided) on or before May 25, 2002.  
If you do not wish to sell to Metropolitan, kindly 
complete and return the enclosed response sheet.  If 
you previously completed and returned the Assignment 
No. 
2003AP1806   
 
7 
 
form and now wish to change your decision, please 
indicate that change on the enclosed response sheet.  
¶13 In the May 10, 2002, letter, Levins also included a 
chart comparing the two potential sales.  As with her April 29 
letter encouraging the limited partners to agree to the sale to 
Metropolitan, the chart included in Levins' May 10 mailing 
indicated that, with regard to the sale to Metropolitan under 
the LPPA, "[n]o other contingencies remain." 
¶14 The record does not clearly demonstrate, and the 
circuit court made no finding, as to whether the required two-
thirds percent of limited partners had agreed to the sale to 
Metropolitan prior to Levins' May 10 letter.   
¶15 On May 14, Genzel sent Levins a letter confirming that 
all of Metropolitan's contingencies had been met and that 
Metropolitan was "ready, willing, and able to close the [LPPA] 
transaction."  In the letter, Genzel inquired about Levins' 
progress with obtaining the required two-thirds assignments from 
GEA's limited partners.  Genzel suggested a closing date of June 
5, 2002. 
¶16 Between May 10 and May 17, 2002, Levins received 
responses from a majority of the limited partners regarding the 
Steadfast offer.  On May 17, 2002, GEA faxed a letter to 
Metropolitan stating that the LPPA between Metropolitan and GEA 
No. 
2003AP1806   
 
8 
 
was terminated because GEA had been unable to secure the 
required two-thirds limited partnership assignments.6   
¶17 On July 11, 2002, GEA filed a declaratory judgment 
action asking the court to hold that GEA had properly and 
validly 
terminated 
the 
LPPA. 
 
On 
September 
17, 
2002, 
Metropolitan filed a summons and complaint seeking damages based 
on the actions of GEA and its representatives.  Metropolitan's 
complaint was consolidated with GEA's request for a declaratory 
judgment.  On April 30, 2003, the circuit court dismissed some 
of Metropolitan's claims,7 but allowed Metropolitan to proceed 
with 
the 
following 
claims 
against 
GEA: 
(1) 
intentional 
interference with the contractual relationship; (2) breach of 
implied duty of good faith; and (3) negligence.  The circuit 
court did not grant GEA's motion for summary judgment based on 
GEA's theory that there was no contract.   
¶18 GEA 
then 
filed 
a 
motion 
for 
summary 
judgment, 
asserting that no contract existed due to the lack of sufficient 
definiteness in the financing contingency provision.  On May 22, 
                                                 
6 We note that although Steadfast accepted GEA's May 10 
offer, GEA received an offer to purchase from a third party for 
$3,800,000 
while 
the 
Steadfast 
offer 
was 
pending. 
 
GEA 
ultimately agreed to pay Steadfast $200,000 to terminate the 
contract between GEA and Steadfast and sold the GEA partnership 
to the third party on August 30, 2002.  The sale of GEA to this 
third party, however, is not before this court. 
7 Metropolitan originally filed claims against GEA for 
breach of contract, breach of implied duty of good faith, 
intentional interference with contract, breach of fiduciary 
duty, negligence, and conversion.  The trial court dismissed the 
claims against GEA for breach of contract, breach of fiduciary 
duty, and conversion.   
No. 
2003AP1806   
 
9 
 
2003, the circuit court adopted GEA's "no contract" theory, 
finding the contract indefinite and unenforceable, and dismissed 
Metropolitan's remaining claims against GEA. 
¶19 The court of appeals reversed, concluding that the 
financing contingency did not render the contract illusory, and 
remanded because there existed an issue of material fact 
regarding Metropolitan's claim that the financing contingency 
was waived.   
II 
¶20 This matter is before us following the circuit court's 
grant of summary judgment, which was subsequently reversed by 
the court of appeals.  We review summary judgment decisions de 
novo, benefiting from the circuit court's decision, but applying 
the same methodology as the circuit court.  Linden v. Cascade 
Stone Co., Inc., 2005 WI 113, ¶5, 283 Wis. 2d 606, 699 
N.W.2d 189.  We examine all evidence presented to the circuit 
court and determine whether a genuine issue exists as to any 
material fact, or whether reasonable conflicting inferences may 
be drawn from the undisputed facts.  State Bank of La Crosse v. 
Elsen, 128 Wis. 2d 508, 511, 383 N.W.2d 916 (Ct. App. 1986).  
"All reasonable inferences drawn from the underlying facts 
contained in these documents that are in the record must be 
viewed in the light most favorable to the non-moving party." 
Johnson v. Rogers Memorial Hosp., Inc., 2005 WI 114, ¶30, 283 
Wis. 2d 384, 
700 
N.W.2d 
27 
(citing 
Grams 
v. 
Boss, 
97 
Wis. 2d 332, 339, 294 N.W.2d 473 (1980)). 
No. 
2003AP1806   
 
10 
 
¶21 Summary judgment must be granted "if the pleadings, 
depositions, answers to interrogatories, and admissions on file, 
together with the affidavits, if any, show that there is no 
genuine issue as to any material fact and that the moving party 
is entitled to a judgment as a matter of law." Id. (citing 
Wis. Stat. § 802.08(2) (2003-04)).8  "An issue of fact is genuine 
if a reasonable jury could find for the nonmoving party.  A 
material fact is such fact that would influence the outcome of 
the controversy." Marine Bank v. Taz's Trucking, Inc., 2005 WI 
65, ¶12, 281 Wis. 2d 275, 697 N.W.2d 90 (citations omitted).  
Therefore, summary judgment is appropriate only when there is no 
dispute over facts that would affect the outcome of the case. 
¶22 This case also presents issues of contract formation.9  
In evaluating the formation of a contract, this court examines 
                                                 
8 All 
references are 
to 
the 
2003-04 
statutes 
unless 
otherwise noted. 
9 The definiteness requirement is an issue of contract 
formation, not interpretation.  Management Computer Servs., Inc. 
v. Hawkins, Ash, Baptie & Co., 206 Wis. 2d 158, 181-82, 557 
N.W.2d 67 
(1996). 
 
This 
is 
because 
the 
vagueness 
or 
indefiniteness of an essential contract term actually prevents 
the creation of an enforceable contract.  Id. 
For this reason, good faith cannot cure a contract's 
indefiniteness.  Gerruth Realty Co. v. Pire, 17 Wis. 2d 89, 94, 
115 N.W.2d 557 (1962).  This is because no contract exists 
unless and until issues concerning indefiniteness are resolved; 
good faith has nothing to do with contract formation.  It is 
about the parties' performance in a contract setting.  "[G]ood 
faith is another way to describe the effort to devise terms to 
fill contractual gaps.  As a method to fill gaps, it has little 
to do with the formation of contracts."  Hauer v. Union State 
Bank of Wautoma, 192 Wis. 2d 576, 597, 532 N.W.2d 546 (Ct. App. 
1995) (citing Continental Bank, N.A. v. Everett, 964 F.2d 701, 
705 (7th Cir. 1992)).   
No. 
2003AP1806   
 
11 
 
whether a contractual provision is "definite as to the parties' 
basic commitments and obligations."  Management Computer Servs., 
Inc. v. Hawkins, Ash, Baptie & Co., 206 Wis. 2d 158, 178, 557 
N.W.2d 67 (1996) (citation omitted).  A contract must be 
definite and certain as to its basic terms and requirements to 
be enforceable.  Herder Hallmark Consultants, Inc. v. Regnier 
Consulting Group, Inc., 2004 WI App 134, ¶8, 275 Wis. 2d 349, 
685 N.W.2d 564 (citation omitted).  Whether provisions of a 
contract are definite "is a question of law which an appellate 
court decides independently of the circuit court's decision."  
Energy Complexes, Inc. v. Eau Claire County, 152 Wis. 2d 453, 
467, 449 N.W.2d 35 (1989).     
III 
¶23 In the present case, GEA asserts that the financing 
contingency contained in Section 5.7 of the LPPA was indefinite 
and illusory, and therefore unenforceable.  We first examine 
whether the financing contingency expressed in the LPPA is 
indefinite, thereby 
rendering 
the 
entire contract between 
Metropolitan and GEA void and unenforceable.   
¶24 A financing clause is sufficiently definite if it 
establishes that the parties agreed to the terms of financing.  
Gerruth Realty Co. v. Pire, 17 Wis. 2d 89, 93, 115 N.W.2d 557 
(1962).  Certainty of contract terms and definiteness require 
mutual assent by way of a meeting of the minds.  Herder 
                                                                                                                                                             
Therefore, Metropolitan was under no good faith duty to 
obtain financing unless the financing contingency was definite 
enough to have formed an enforceable contract. 
No. 
2003AP1806   
 
12 
 
Hallmark, 275 Wis. 2d 349, ¶8  (citation omitted).  This court 
has concluded that there need not be a literal meeting of the 
minds 
because 
"mutual 
assent 
is 
judged 
by 
an 
objective 
standard."  Management Computer, 206 Wis. 2d at 178.  The 
question is whether there is sufficient evidence to ascertain 
the intent of the parties; this court examines both the wording 
of the contract as well as the surrounding circumstances in an 
attempt to discern the parties' intent.  Management Computer, 
206 Wis. 2d at 179, Gerruth, 17 Wis. 2d at 91-92. 
¶25 When there is evidence that two parties intended to 
enter into the contract, "the trier of fact should not frustrate 
their intentions, but rather should attach a 'sufficiently 
definite meaning' to the contract language if possible."  
Management Computer, 206 Wis. 2d at 179 (citations omitted) 
(emphasis added).  In order to hold a contract void for 
indefiniteness, the "[i]ndefiniteness must reach the point where 
construction becomes futile."  Id. at 180 (citations and 
quotations omitted).  Yet, even if the parties' written 
agreement is expressed in "terms so vague and indefinite as to 
be incapable of interpretation with a reasonable degree of 
certainty," the parties' 
subsequent 
conduct 
and 
practical 
interpretation can cure this defect by evincing the parties' 
intent in entering the contract.  Id. at 179-80 (citations 
omitted).  Therefore, a contract that fails to sufficiently 
address the financing contingency is not void for indefiniteness 
if the parties' subsequent actions clarify the parties' intent 
at the time they entered into the contract.  Gerruth, 17 
No. 
2003AP1806   
 
13 
 
Wis. 2d at 91-92.10 See also Herder Hallmark, 275 Wis. 2d 349, 
¶10 (finding the subsequent actions sufficient to cure any 
indefiniteness with respect to the lack of a sale price when the 
purchaser hired the seller's employees, took over the operation 
of the business, and the parties attempted to reach a fair 
contract price).   
¶26 However, in order for the subsequent action to remove 
any indefiniteness, the action must include "some interpretative 
conduct by both parties, consisting either of the rendition of 
some performance by each one or by the willing acceptance by one 
of them of such a performance rendered by the other."  Nodolf v. 
Nelson, 103 Wis. 2d 656, 659, 309 N.W.2d 397 (Ct. App. 1981) 
(quoting 1 Corbin on Contracts sec. 101 at 459 (2d ed. 1963)) 
(concluding that an agreement with an indefinite financing 
contingency cannot become definite simply because the purchaser 
obtains financing because unilateral action by one party is not 
enough) (emphasis added)).  See also Gerruth, 17 Wis. 2d at 94. 
¶27 Here, the LPPA's financing contingency states: 
Buyer shall have obtained unconditional financing in 
an amount equal to 85% of the purchase price from a 
reputable Lender on terms satisfactory to Buyer and an 
appraisal which is satisfactory to Buyer in Buyer's 
sole discretion.  Unless Buyer waives this contingency 
by written notice to Seller within 30 days following 
full execution of this Agreement, this Agreement shall 
terminate without further force or effect and Buyer's 
earnest money shall be promptly returned. 
                                                 
10 In Gerruth, although this court examined the surrounding 
circumstances, it found that it could not determine the parties' 
intent regarding the meaning of the financing contingency. 
Gerruth, 17 Wis. 2d at 93-95.   
No. 
2003AP1806   
 
14 
 
¶28 GEA contends that the contingency is vague and 
indefinite because the requirement that the financing terms be 
"satisfactory to the Buyer" fails to include any information 
regarding the terms of the financing that Metropolitan had in 
mind.  See Gerruth, 17 Wis. 2d at 92.   
¶29 We agree that the parties failed to specify financing 
terms in the written contract.  The critical question in 
determining the enforceability of the LPPA, therefore, becomes 
whether there exists sufficient evidence of subsequent conduct 
in the record upon which this court can ascertain whether the 
parties mutually agreed to acceptable financing terms at the 
time the LPPA was formed.   
¶30 The record reveals that the subsequent acts of both 
Metropolitan and GEA provide sufficient evidence of the parties' 
intent, rendering the contract enforceable.  The correspondence 
between the parties indicates that the parties developed a 
cooperative relationship in attempting to ensure that the sale 
came to fruition.  Metropolitan sought financing for the 
purchase 
of 
the 
GEA 
partnership. 
 
On 
April 
17, 
2002, 
Metropolitan requested additional information from GEA required 
for the bank loan and asked for a short extension in order to 
meet the financing contingency.  GEA provided Metropolitan with 
the information requested and granted the extension without any 
objection.  Metropolitan ultimately obtained adequate financing 
from Anchor Bank.  GEA made no objection to Metropolitan's 
assertion that Metropolitan had met the financing contingency 
and was able to close.  Levins' April 29 letter to GEA's limited 
No. 
2003AP1806   
 
15 
 
partners 
explicitly 
recognized 
Metropolitan 
had 
met 
the 
requisite financing contingency and recommended that the limited 
partners sell their interest in GEA to Metropolitan.  Levins' 
May 10 mailing also indicated that the financing contingency had 
been met. 
¶31 In short, the correspondence among the parties and 
between GEA and its limited partners clearly demonstrates that 
both parties at the time they entered into the contract intended 
to form a binding contract for the sale and purchase of the GEA 
partnership.  Prior to the May 8, 2002 Steadfast offer, both 
parties clearly treated the LPPA as a certain, definite, and 
enforceable contract.  Compare Krause v. Holand, 33 Wis. 2d 211, 
217, 147 N.W.2d 333 (1967).  Neither party expressed any signs 
of confusion regarding the financing contingency.  The parties 
would have proceeded without any objection to the financing 
contingency had GEA not received a better offer from Steadfast.  
The 
closing 
did 
not 
fail 
because 
of 
the 
contingency.  
Consequently, we conclude that the parties' subsequent conduct 
evinces the parties' intent to enter into the LPPA, rendering 
the contract definite and, therefore, enforceable.  
¶32 GEA also asserts that the financing contingency clause 
is illusory for two reasons.  First, the 
clause 
gives 
Metropolitan sole discretion to approve the financing, giving 
Metropolitan 
full 
control 
over 
determining 
whether 
the 
contingency has been met. Second, the clause gives Metropolitan 
exclusive 
authority 
to 
waive 
the 
contingency, 
allowing 
No. 
2003AP1806   
 
16 
 
Metropolitan to unilaterally create a binding contract where, 
according to GEA, no valid contract existed in the first place.   
¶33 We agree with the court of appeals that the financing 
clause does not render the LPPA illusory.  Metropolitan 
Ventures, 276 Wis. 2d 625, ¶20.  A contract is illusory when the 
contract is "conditional on some fact or event that is wholly 
under the promisor's control and his [or her] bringing it about 
is left wholly to his [or her] own will and discretion . . . ."  
Nodolf, 103 Wis. 2d at 660 (citation and quotation omitted).  
While the financing clause at issue does not specify a 
particular term or rate of financing, it does set forth the 
percentage of the purchase price to be financed along with a 
practicable method in which the sale price would be determined.11  
Metropolitan Ventures, 276 Wis. 2d 625, ¶18.  We agree that 
because of the fluidity involved in the sale of the business, 
financing terms could vary greatly over the 30 days specified in 
the contract, so that inserting a particular term or rate of 
financing would be speculative.  Id., ¶20.  Here, the subsequent 
actions of both parties rendered the financing clause definite.  
Neither 
Metropolitan 
nor 
GEA 
had 
complete 
control 
over 
determining whether the financing contingency had been met: both 
parties came to the conclusion that Metropolitan had obtained 
sufficient financing.  As such, we find that the financing 
contingency was not illusory. 
IV 
                                                 
11 Article II, section 2.1 a. of the LPPA. 
No. 
2003AP1806   
 
17 
 
¶34 Under the terms of the contract, GEA was required, 
among other things, to use its best efforts 1) to ensure GEA did 
not dispose of its assets to a third party; and 2) to obtain the 
assignments of GEA's limited partners.  Metropolitan alleges 
that GEA breached its fiduciary duty, duty of good faith, and 
contractual obligations.  Metropolitan also asserts that GEA 
intentionally interfered with the contractual relationship and 
intentionally, 
or 
at 
least 
negligently, 
made 
material 
misrepresentations to Metropolitan.   
A 
¶35 Parties to a contract have a duty of good faith to 
each other.  Crown Life Ins. Co. v. LaBonte, 111 Wis. 2d 26, 44, 
330 N.W.2d 201 (1983) (citation omitted) (recognizing "the basic 
principle of contract law that the obligation of good faith is 
an implied condition in every contract"); Ekstrom v. State, 45 
Wis. 2d 218, 222, 172 N.W.2d 660 (1969) (citation omitted) 
("Every contract implies good faith and fair dealing between the 
parties to it, and a duty of co-operation on the part of both 
parties.")(quotation 
omitted); 
Chayka 
v. 
Santini, 
47 
Wis. 2d 102, 108, 176 N.W.2d 561 (1970) ("The duty of good faith 
is an implied condition in every contract . . . "); Foseid v. 
State Bank of Cross Plains, 197 Wis. 2d 772, 796, 541 N.W.2d 203 
(Ct. App. 1995) (citation omitted) ("[A] party may be liable for 
breach of the implied contractual covenant of good faith even 
though all the terms of the written agreement may have been 
fulfilled.").  See also Market St. Assoc. Ltd. Partnership v. 
Frey, 941 F.2d 588, 593 (7th Cir. 1991).  In addition, when a 
No. 
2003AP1806   
 
18 
 
contract requires that a party use its "best efforts" to fulfill 
its contractual obligations, the notion of "best efforts" 
incorporates the concept of good faith.  See Western Geophysical 
Co. v. Bold Assoc., 584 F.2d 1164, 1171 (2nd Cir. 1978).  As 
this court has previously stated: 
it may be said that contracts impose on the parties 
thereto a duty to do everything necessary to carry 
them out. . . . Moreover, there is an implied 
undertaking in every contract on the part of each 
party that he [or she] will not intentionally and 
purposely do anything to prevent the other party from 
carrying out his [or her] part of the agreement, or do 
anything which will have the effect of destroying or 
injuring the right of the other party to receive the 
fruits of the contract. Ordinarily if one exacts a 
promise from another to perform an act, the law 
implies 
a 
counter-promise 
against 
arbitrary 
or 
unreasonable conduct on the part of the promisee. 
Ekstrom, 45 Wis. 2d at 222 (quotation and citations omitted). 
¶36 The duty of good faith arises because parties to a 
contract, once executed, have entered into a cooperative 
relationship and have abandoned the wariness that accompanied 
their contract negotiations, adopting some measure of trust of 
the other party.  Id.; See also Market Street, 941 F.2d at 594-
95.  As the parties' performance in executing the contract 
increases, so too grows the "scope and bite of the good faith 
doctrine."  Id., at 595-96.   
¶37 In the present case, GEA and Metropolitan entered into 
a cooperative relationship when they agreed to the contract for 
the sale and purchase of the GEA partnership on March 19, 2002.  
Particular sections of the LPPA require GEA to use its "best 
efforts to ensure that the Partnership [did] not . . . [s]ell or 
No. 
2003AP1806   
 
19 
 
dispose of any asset,"12 to use its "best efforts to keep the 
business of the Partnership intact,"13 and to use its "reasonable 
best efforts to obtain Assignment Agreements from all the 
limited partners."14  The contract's requirement that GEA use its 
"best efforts" explicitly imposes a duty of good faith on GEA to 
preserve the business for the sale to Metropolitan and to obtain 
the limited partners' consent to the sale.  Having concluded 
that the LPPA was an enforceable contract, we conclude that 
Levins and GEA had a duty of good faith arise out of this 
contractual relationship with Metropolitan.   
B 
¶38 A central issue with regard to determining if GEA 
violated its duty of good faith is whether Levins attempted to 
intentionally mislead Metropolitan.  Metropolitan alleges that 
Levins did intentionally mislead Metropolitan by continuing to 
actively pursue other sales, making efforts to dissuade GEA's 
limited partners from assigning their partnership interests in 
GEA, and misrepresenting her authority to act on behalf of GEA's 
limited partners.  GEA contests these allegations.   
¶39 We therefore examine whether Levins or GEA violated 
GEA's duty of good faith to Metropolitan with regard to the 
Steadfast offer of purchase, Levins' efforts to dissuade the 
limited partners from assigning their partnership interests in 
                                                 
12 Section 4.2.b. 
13 Section 4.3. 
14 Section 5.6. 
No. 
2003AP1806   
 
20 
 
GEA, and Levins' representations regarding her authority to act 
on behalf of GEA's limited partners.  We reiterate that this 
case arises out of a summary judgment motion by GEA and, 
therefore, 
"[a]ll 
reasonable 
inferences 
drawn 
from 
the 
underlying facts contained in these documents that are in the 
record must be viewed in the light most favorable to the non-
moving party."  Johnson, 283 Wis. 2d 384, ¶30, (citations 
omitted). 
¶40 Metropolitan contends that on May 8, 2002, GEA 
received an offer from Steadfast for the purchase of the 
partnership and GEA, without notifying Metropolitan or GEA's 
limited partners of Steadfast's May 8 offer, negotiated terms 
and conditions of a sale to Steadfast.  Moreover, on May 10, GEA 
countered Steadfast's May 8 offer without first notifying 
Metropolitan or GEA's limited partners of Steadfast's original 
May 8 offer.   
¶41 Sections 4.2 and 4.3 of the LPPA required GEA to use 
its best efforts to ensure that GEA did not dispose of its 
assets to a third party and to ensure the business remained 
intact.  Metropolitan asserts that GEA's failure to remove the 
property from the market and attempt to attract third-party 
offers to purchase the partnership violates these sections.  
However, GEA contests Metropolitan's assertion and argues that 
the Steadfast offer was entirely unsolicited.  Moreover, GEA 
asserts 
that 
there 
was 
no 
"exclusive 
dealing" 
provision 
bargained for within the LPPA.  GEA further counters that it did 
not violate its "best efforts" duties by entering into a 
No. 
2003AP1806   
 
21 
 
secondary agreement with Steadfast that bound them only if and 
when the LPPA terminated.   
¶42 In addition to the dispute over the Steadfast offer, 
Metropolitan asserts that 
Levins 
actively 
dissuaded 
GEA's 
limited partners from agreeing to sell GEA to Metropolitan, in 
direct violation of the terms of the LPPA.  The LPPA required 
GEA to use its best efforts to encourage each of GEA's limited 
partners to assign to Metropolitan his or her partnership 
interests in GEA and to attempt to obtain these assignments from 
at least two-thirds of GEA's limited partners.  Although the 
parties agree that the limited partners were not obligated to 
sell their interests prior to signing the Assignment Agreements, 
the parties dispute whether the limited partners were obligated 
to sell their interests upon authorizing the sale by signing the 
Assignment Agreements.  Metropolitan asserts the Assignment 
Agreements should have been held in escrow until closing under 
Section 1.1 of the LPPA.  Metropolitan further asserts that GEA 
purposefully prevented 
the 
satisfaction 
of 
the 
two-thirds 
contingency and took advantage of GEA's self-caused failure in 
order to terminate the LPPA and pursue another sale.  In 
contrast, GEA contends that Levins had no authority to deliver 
any of the Assignment Agreements prior to closing and that the 
limited partners were free to revoke their Assignment Agreements 
at any time prior to closing. 
¶43 Finally, Metropolitan asserts that GEA intentionally, 
or at least negligently, made material misrepresentations to 
Metropolitan when GEA indicated it had authority to act on 
No. 
2003AP1806   
 
22 
 
behalf of GEA's limited partners because Levins owed a duty to 
GEA's limited partners that conflicted with the terms and 
conditions of the LPPA.   
¶44 GEA responds that Levins had a fiduciary duty to GEA's 
limited partners to inform them of the Steadfast offer and that 
Levins would have violated this duty had she not done so. Under 
Wis. Stat. § 178.18(1), the fiduciary obligations of a partner 
encompass the formation, conduct, and liquidation of the 
partnership.  Wis. Stat. § 178.18(1).  The statute states, in 
relevant part: 
Every partner must account to the partnership for any 
benefit, and hold as trustee for it any profits 
derived by him or her without the consent of the other 
partners from any transaction connected with the 
formation, conduct, or liquidation of the partnership 
or from any use by him or her of partnership property. 
Wis. Stat. § 178.18(1). 
¶45 We conclude that genuine issues of material fact exist 
concerning GEA's good faith dealings with Metropolitan and its 
"best efforts" to ensure that it did not dispose of its assets 
or otherwise violate the terms and conditions of the LPPA prior 
to closing.  Accordingly, we remand this matter to the circuit 
court to resolve these issues.  
V 
¶46 This case involves questions about the definiteness of 
the financing contingency in a contract for the sale of GEA to 
Metropolitan, and whether Levins and GEA met their duty of good 
faith in executing the contract.  We conclude that even though 
the financing contingency in the written contract was vague, the 
No. 
2003AP1806   
 
23 
 
subsequent actions by both parties demonstrate that the parties 
mutually agreed to acceptable financing terms.  We therefore 
conclude that the contract at issue is not too indefinite and is 
enforceable.   
¶47 We also conclude that Levins owed a duty of good faith 
to Metropolitan, but that genuine issues of material fact exist 
concerning GEA's "best efforts" to ensure that it did not 
dispose of its assets and whether it violated its duty of good 
faith dealing with respect to the contract.  We therefore affirm 
the decision of the court of appeals and remand this matter for 
further proceedings consistent with this opinion. 
By the Court.—The decision of the court of appeals is 
affirmed, and this matter is remanded to the circuit court for 
further proceedings consistent with this opinion. 
¶48 JON P. WILCOX, J., did not participate.   
 
 
No.  2003AP1806.ssa 
 
1 
 
¶49 SHIRLEY S. ABRAHAMSON, C.J.    (concurring in part).  
I agree with the majority opinion that this matter must be 
remanded to the circuit court.  I would, however, remand, in 
addition to the other issues, the factual question whether the 
parties mutually agreed to eliminate the illusory financing 
clause and proceed with the contract without a financing clause.   
¶50 The circuit court properly concluded, I believe, that 
the financing clause rendered the contract illusory and void.  
The circuit court then concluded as a matter of law that the 
parties' communications were not sufficient to eliminate the 
financing clause or to constitute an agreement for a new 
contract with the same terms as the original "contract," except 
for the financing clause.  Here's where I part with the circuit 
court.  I think the intent of the parties is a matter of fact 
for the fact-finder, not for the circuit court on summary 
judgment. 
¶51 The court of appeals concluded that the financing 
provision did not render the contract illusory and that there is 
a material issue of fact regarding whether the financing 
contingency was waived.  Accordingly, it remanded the instant 
case to the circuit court for a determination of whether the 
buyer waived the financing clause.1       
¶52 In contrast, the majority opinion seems to conclude 
that the written agreement was indefinite and was made definite 
by the parties' subsequent conduct.  The majority opinion 
                                                 
1 Metro. Ventures, LLC v. GEA Assocs., 2004 WI App 189, 
¶¶23-29, 276 Wis. 2d 625, 688 N.W.2d 722. 
No.  2003AP1806.ssa 
 
2 
 
concludes that "both parties came to the conclusion that 
Metropolitan had obtained sufficient financing."2  
¶53 I conclude that the financing provision made the 
agreement illusory and that the record is insufficient to 
determine as a matter of law on summary judgment whether the 
parties formed a new contract (with the same terms as the 
original contract) by agreeing to eliminate the financing 
clause.   
¶54 The majority opinion errs, I think, by conflating the 
question whether the contract is illusory with the question 
whether the contract is indefinite.  Although the concepts of 
illusoriness and indefiniteness may overlap and Wisconsin case 
law sometimes uses the words confusedly, they should be analyzed 
separately.3   
¶55 A promise is illusory if "[w]ords of [the] promise [] 
by their terms make performance entirely optional with the 
'promisor.'"4  The Wisconsin case law is in accord.5   
                                                 
2 Majority op., ¶33. 
3 Professor Farnsworth analyzes Gerruth Realty Co. v. Pire, 
17 Wis. 2d 89, 95, 115 N.W.2d 557 (1962), to say that the 
buyer's promise to obtain financing was so indefinite that it 
was illusory.  See 1 E. Allan Farnsworth, Farnsworth on 
Contracts § 2.13 n.13 (3d ed. 2004). 
4 Restatement (Second) of Contracts § 77 cmt. a. (1981).  
See also 1 Farnsworth, supra note 3, § 2.13; 2 Joseph M. 
Perillo, Corbin on Contracts § 5.28 (1995). 
5 Krause v. Holand, 33 Wis. 2d 211, 217, 147 N.W.2d 333 
(1967) (agreement "subject to securing a loan by 8/31/64" was 
illusory) (citing Gerruth Realty, 17 Wis. 2d at 95). 
No.  2003AP1806.ssa 
 
3 
 
¶56 The court of appeals in Nodolf v. Nelson, 103 
Wis. 2d 656, 660, 309 N.W.2d 397 (Ct. App. 1981) (quoting 1 
Corbin on Contracts § 149, at 656-59 (2d ed. 1963), observed 
that a contract is illusory when the contract is conditioned on 
a fact or event wholly under the control of one party:  
"[P]romissory words are illusory if they are in form a promise 
that is conditional on some fact or event that is wholly under 
the promisor's control and his bringing it about is left wholly 
to his own will and discretion."6  A putative contract that is 
illusory is no contract at all, that is, such a contract is 
void.7   
¶57 As the court of appeals further explained in Nodolf, a 
financing contingency renders the contract incurably illusory 
and unenforceable if the contingency grants to one party the 
exclusive right to determine whether suitable financing has been 
obtained:  "The buyer cannot have the exclusive right to 
determine whether financing has been obtained without rendering 
illusory his promise to purchase.  The fact that he chose to 
                                                 
6 Illusory contracts are not contracts because the illusory 
language "makes performance optional with the promisor no matter 
what may happen, or no matter what course of conduct in other 
respects the promisor may pursue[;] it does not justify the 
promisee in understanding that a commitment has been made."  1 
Richard A. Lord, Williston on Contracts § 1.2, at 11 (4th ed. 
1990).   
7 First Wis. Nat'l Bank of Milwaukee v. Oby, 52 Wis. 2d 1, 
7-8, 188 N.W.2d 454 (1971). 
No.  2003AP1806.ssa 
 
4 
 
fulfill the financing condition therefore does not cure the 
unenforceability of the agreement."8   
¶58 The financing condition at issue in the present case 
states as follows: 
5.7 Financing Contingency.  Buyer shall have obtained 
unconditional financing in an amount equal to 85% of 
the purchase price from a reputable Lender on terms 
satisfactory to Buyer and an appraisal which is 
satisfactory to Buyer in Buyer's sole discretion.  
Unless Buyer waives this contingency by written notice 
to Seller within 30 days following full execution of 
this Agreement, this Agreement shall terminate without 
further force or effect and Buyer's earnest money 
shall be promptly returned. 
(Emphasis added.) 
¶59 I agree with the circuit court that the financing 
provision in the instant case is illusory.  Absent construing 
the contract to require good faith relating to financing (and 
the circuit court explicitly concluded that the financing 
provision did not include a good faith requirement),9 the 
contract is plainly illusory because the buyer retains sole 
                                                 
8 See also Gerruth Realty, 17 Wis. 2d at 92 (contract 
provision that "allows one party to a contract to determine 
without limitation and in a subjective manner the meaning of an 
ambiguous term, comes dangerously close to an illusory or 
aleatory contract"). 
9 Professor Farnsworth writes that "[c]ourts have responded 
to facially insubstantial promises in two diametrically opposite 
ways."  One way is to declare the contract void as illusory.  A 
second and more recent way is to read the apparently illusory 
promise so that it is not illusory; courts read the promise as a 
promise to act in good faith in exercising judgment.  1 
Farnsworth, supra note 3, § 2.13 at 133-38.  See also 2 Perillo, 
supra note 4, § 5.28 at 148 (same). 
No.  2003AP1806.ssa 
 
5 
 
discretion about the sufficiency of financing.10  Thus, the 
putative contract in the instant case was void at the time of 
formation.  Only a new contract will save a void agreement 
between the buyer and seller. 
¶60 The majority opinion dismisses the claim that the 
contract is illusory, concluding that "the subsequent actions of 
both parties rendered the financing clause definite.  Neither 
Metropolitan nor GEA had complete control over determining 
whether the financing contingency had been met: both parties 
came to the conclusion that Metropolitan had obtained sufficient 
financing."11 
¶61 I agree with the majority opinion that an indefinite 
contract may be made definite.  A contract provision is 
indefinite (or uncertain) if the provisions in the contract do 
not "provide a basis for determining the existence of breach and 
for giving an appropriate remedy."12  This court has held that if 
a contract cannot be given sufficient definiteness, the contract 
will not be enforced.13 
                                                 
10 Nodolf v. Nelson, 103 Wis. 2d 656, 660, 309 N.W.2d 397 
(Ct. App. 1981). 
11 Majority op., ¶33 (emphasis removed). 
12 Restatement 
(Second) 
of 
Contracts 
§ 33(2) 
(1981) 
(restatement provision regarding "certainty"); 1 Farnsworth, 
supra note 3, §§ 3.1, 3.29; 1 Perillo, supra note 4, § 4.1.  For 
further discussion of indefiniteness in Wisconsin case law, see 
Mgmt. Computer Servs. v. Hawkins, Ash, Baptie & Co., 206 
Wis. 2d 158, 178-80, 557 N.W.2d 67 (1996).    
13 Mgmt. Computer Servs., 206 Wis. 2d at 178-80. 
No.  2003AP1806.ssa 
 
6 
 
¶62 A contract that appears indefinite on its face may be 
made definite by trade usage of the terms in the contract or the 
course of dealing between the parties.14  The majority opinion 
concludes the subsequent actions of both parties rendered this 
contract definite.  But if the contract was illusory when made, 
it cannot be cured by the subsequent conduct. 
¶63 Because I conclude that the financing clause renders 
the contract illusory and void, I would remand the matter to the 
circuit court for further proceedings to determine whether the 
parties formed a new contract without a financing term. 
¶64 I am authorized to state that Justice PATIENCE DRAKE 
ROGGENSACK joins this opinion.  
 
                                                 
14 Restatement (Second) of Contracts § 33 cmt. a (1981). 
No.  2003AP1806.ssa 
 
 
 
1