2015 WI 49



# S UPREME 

# C OURT OF 

# W ISCONSIN

C ASE N O .: 2013AP679 C OMPLETE T ITLE : MS Real Estate Holdings, LLC,

Plaintiff-Appellant,

v. Donald P. Fox Family Trust, Jean A. Fox Revocable Living Trust, Jean A. Fox, Michael J. Fox, Thomas P. Fox, Karen L. Brazee, Carol L. Brewer, Ellen J. Fox and Amy J. Alaniz, Defendants-Respondents-Petitioners.

REVIEW OF A DECISION OF THE COURT OF APPEALS (Reported at 356 Wis. 2d 307, 853 N.W.2d 627)

(Ct. App. 2014 – Published) PDC No: 2014 WI App 84

O PINION F ILED : May 15, 2015 S UBMITTED ON B RIEFS : O RAL A RGUMENT : March 3, 3015

S OURCE OF A PPEAL : C OURT : Circuit C OUNTY : Outagamie J UDGE : Michael W. Gage

J USTICES : C ONCURRED : D ISSENTED : N OT P ARTICIPATING :

A TTORNEYS : For the defendants-respondents-petitioners, there w ere briefs by Charles D. Koehler , Michael C. Menghini , and Herrling Clark Law Firm, Ltd. , and oral argument by Charles D. Koehler

.

For the plaintiff-appellant, there was a brief by Jordan J. Hemaidan , Michael P. Screnock , and Michael Best & Friedrich LLP , Madison. Oral argument by Jordan Hemaidan.2

There was an amicus curiae brief by Cori Moore Lamont and Wisconsin Realtors Association , Madison, on behalf of the Wisconsin Realtors Association.2015 WI 49

NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 2013AP679 (L.C. No. 2012CV214)

STATE OF WISCONSIN : IN SUPREME COURT

MS Real Estate Holdings, LLC, Plaintiff-Appellant,

v. Donald P. Fox Family Trust, Jean A. Fox Revocable Living Trust, Jean A. Fox, Michael J. Fox, Thomas P. Fox, Karen L. Brazee, Carol L. Brewer, Ellen J. Fox and Amy J. Alaniz, Defendants-Respondents-Petitioners. 

## FILED

MAY 15, 2015

Diane M. Fremgen Clerk of Supreme Court

REVIEW of a decision of the Court of Appeals. Affirmed.

¶1 MICHAEL J. GABLEMAN, J. We review a published decision of the court of appeals 1 reversing the Outagamie County

1 MS Real Estate Holdings, LLC v. Donald P. Fox Fami ly Trust, 2014 WI App 84, 356 Wis. 2d 307, 853 N.W.2d 627.No. 2013AP679

2 circuit court's order 2 granting summary judgment in favor of Donald P. Fox Family Trust, Jean A. Fox Revocable L iving Trust, Jean A. Fox, Michael J. Fox, Thomas P. Fox, Karen L . Brazee, Carol L. Brewer, Ellen J. Fox, and Amy J. Alniz ("t he Foxes"). The Foxes moved for summary judgment, arguing that the right of

first refusal contract between the Foxes and MS Rea l Estate Holdings, LLC ("MS Real Estate") 3 was (1) indefinite and (2)

terminable at will. The circuit court concluded th at the right of first refusal contract was indefinite and subjec t to termination at will, by either party, after a reaso nable period of time. This was so, the circuit court reasoned, because the right of first refusal contract identified neither a specific duration for the contract, nor an event terminating the contract

that was certain to occur. ¶2 The court of appeals reversed, concluding that t he right of first refusal contract is not indefinite. MS Real Estate Holdings, LLC v. Donald P. Fox Family Trust, 2014 WI App 84, ¶23, 356 Wis. 2d 307, 853 N.W.2d 627. The cour t of appeals concluded that the right of first refusal contract is not

indefinite because in the event MS Real Estate fail s to exercise the right of first refusal to purchase, such failur e would necessarily constitute a waiver of the right to lea se. Id. Therefore, the court of appeals concluded the entir e right of

2 The Honorable Michael W. Gage, presiding.

3 Formerly known as Tidy View Dairy, Inc.No. 2013AP679

3 first refusal contract (that is, both the purchase and lease provisions) expires only when MS Real Estate either exercises, or declines to exercise, its right to purchase. Id ., ¶¶29-31. ¶3 The sole issue presented for our consideration i s whether a triggering event uncertain to occur rende rs a right of first refusal contract indefinite, thereby allowing a party to terminate the contract at will after a reasonable p eriod of

time. ¶4 We hold that a right of first refusal contract i s definite as to duration when it specifies an event that triggers the right and requires the right holder to either e xercise or waive the right within a specified period of time t hereafter, even if the triggering event is not certain to occu r. Therefore, the right of first refusal contract at i ssue here is not terminable at will after a reasonable period of time. Rather, by the terms of the contract, the right of first refusal continues until there is a sale of the property, ei ther to MS Real Estate or to a third party in the event that M S Real Estate declines to exercise its right of first refusal to purchase, thereby waiving its right. Accordingly, the decisi on of the court of appeals is affirmed.

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY ¶5 MS Real Estate operates a dairy farm that adjoin s approximately 450 acres of farmland in the Town of Freedom in Outagamie County, Wisconsin, owned by the Foxes ("t he Fox Land"). On January 16, 1998, MS Real Estate, as Ti dy View Dairy, Inc., contracted with Donald P. Fox and Jean A. Fox for aNo. 2013AP679

4 right of first refusal to purchase or lease the Fox Land. MS Real Estate paid Donald and Jean Fox $4,000 4 for the right of first refusal to purchase the Fox Land and the righ t of first

refusal to lease the Fox Land. ¶6 The purchase provision of the right of first ref usal

contract states: Section 1: Right of First Refusal to Purchase Fox grants and conveys to Tidy-View a first right t o purchase the Property, or any part thereof, for the same price and on the same terms which Fox is willi ng to transfer such Property to another party. Prior to such transfer, Fox shall deliver to Tidy-View a written copy of the Offer, which Fox is willing to accept. Tidy-View shall then have 15 (fifteen) day s in which to accept or reject the Offer according to its price, terms and conditions. If the Offer is accepted, the transfer shall be closed in accordanc e with the Offer with Tidy-View as purchaser. If the Offer is rejected, Fox may complete the sale in str ict compliance with the Offer. If the sale is not clos ed, this first right of refusal shall again take effect

. ¶7 Under the Right of First Refusal to Purchase provision, should the Foxes receive an acceptable o ffer to purchase, they must submit the offer to MS Real Est ate—the successor to Tidy-View, see supra n.3. MS Real Est ate would then have 15 days to accept or reject the offer. I f MS Real Estate rejects the offer, the Foxes may complete th e sale with the third-party that made the initial offer, but on ly on the

4 There is some dispute in the record as to whether MS Real Estate paid $4,000 or $4,500 for the right of first refusal. In either event, the consideration paid by MS Real Est ate is not a factor in our analysis.No. 2013AP679

5 terms of the initial offer accepted by the Foxes. The contract also provides that the right of first refusal to pu rchase reattaches if the third-party sale does not close. ¶8 The Right to Lease provision states: Section 2: Right to Lease 2.1 Leasing Rights. Fox grants and conveys to Tidy

View a first right to lease the Property, or any pa rt thereof, for the same price and on the same terms which Fox is wiling to Lease such Property to anoth er party. Prior to execution of any Lease, Fox shall deliver to Tidy-View a written copy of the Lease, which Fox is willing to accept. Tidy-View shall th en have 15 (fifteen) days in which to accept or reject the Lease according to its price, terms and conditions. If the Lease is accepted, Tidy-View sh all be obligated to make all payments in accordance wit h the Lease with Tidy-View as Lessee. If the Lease i s rejected, Fox may execute the Lease as Lessor with the other party as Lessee. If the Lease is not execute d, the first right to lease shall again take effect. ¶9 The Right to Lease provision provides that MS Re al Estate has a first right to lease the Fox Land whic h operates in a manner similar to the Right of First Refusal to P urchase provision. If the Foxes receive a lease offer they would accept, they must forward the offer to MS Real Esta te. MS Real Estate must either accept or reject the lease offer within 15 days. If MS Real Estate rejects the lease, the Fox es may execute the lease with the third-party. If the Fox es do not execute the lease, then MS Real Estate's first righ t to lease

reattaches. ¶10 The lease provision also includes a Continuing Rights provision under Section 2.2, which states that the right toNo. 2013AP679

6 lease "shall continue for any subsequent renewal of a Lease with another party or upon entering into a new Lease wit h any other party. It is specifically intended that this leasi ng right shall not extinguish unless waived by [MS Real Esta te]." ¶11 The right of first refusal contract also contai ns a Binding Effect provision under Section 4, which sta tes that "[t]his Agreement shall be binding upon the respect ive parties, their heirs, personal representatives, successors i n interest and assigns." ¶12 The Foxes leased the Fox Land to MS Real Estate in 2001. On October 4, 2006, Donald Fox sent MS Real Estate a commercial offer to purchase 37.4 acres of the Fox Land, putting MS Real Estate on notice that it had 15 days to acc ept or reject

the offer. MS Real Estate declined to exercise its right to purchase the 37.4 acres. MS Real Estate notified t he Foxes by letter and attached an agreement entitled "Release of Parcel From Right of First Refusal." The letter stated th at the attached agreement constituted waiver of the right of first refusal as to the 37.4 acres in question and reasse rted MS Real Estate's right to the remainder of the Fox Land. H owever, the sale did not close, and, under the terms of the rig ht of first refusal contract, the right of first refusal to pur chase

reattached. ¶13 On January 11, 2007, the parties executed a fiv e-year land use agreement, which expired on January 11, 20 12. The agreement contained a handwritten provision that st ated MS Real Estate had the right of first refusal to purchase t he land andNo. 2013AP679

7 that if the Foxes sold any portion of the Fox Land, the rent would be adjusted accordingly. ¶14 On July 29, 2011, the Foxes sent a notice to MS Real Estate which noted that their lease agreement would expire in January. In that notice, the Foxes invited MS Real Estate to submit a bid to lease the property beginning in 201 2. The Foxes sent a second notice on October 26, 2011, which aga in requested that MS Real Estate present a bid on a 2012 lease o f the Fox land. The notice also acknowledged MS Real Estate' s right to first lease and that the Foxes would follow the pro cedure for allowing MS Real Estate to exercise its right shoul d they receive other bids to lease the property. ¶15 MS Real Estate responded on November 8, 2011, b y proposing two leases for the Foxes to choose betwee n: a one-year lease and a three-year lease. The lease proposals also referenced MS Real Estate's right of first refusal and its intent to abide by the contract's provisions. ¶16 On December 1, 2011, the Foxes notified MS Real Estate that it was soliciting alternate lease proposals. On December 5, 2011, the Foxes sent MS Real Estate a proposal f rom Tinedale Cropping to lease the property from January 1, 2012 , to December 31, 2016, at an initial price of $200 per acre ("th e Tinedale Proposal"). MS Real Estate, believing that the Tin edale Proposal was acceptable to the Foxes, attempted to exercise its right of first lease on December 16, 2011, by notif ying the Foxes that it accepted the terms of the Tinedale Pr oposal. MS Real Estate included a signed lease agreement for t he Fox LandNo. 2013AP679

8 under the terms of the Tinedale Proposal. The Foxe s refused to

execute the lease. ¶17 On February 8, 2012, the Foxes delivered a seco nd lease to MS Real Estate pursuant to the right of fi rst refusal contract which Kavanaugh Farms and the Foxes had ex ecuted on February 6, 2012 ("the Kavanaugh Lease"). The Kava naugh Lease ran from 2012 through 2016 and provided for a rent of $225 per acre in the first year, with a two percent annual i ncrease in the cost per acre. The Foxes did not provide MS Re al Estate with a copy of the Kavanaugh Lease prior to its exe cution, but

communicated to MS Real Estate that it retained the right of first lease and could accept the terms of the Kavan augh Lease. ¶18 On February 12, 2012, MS Real Estate filed suit in Outagamie County circuit court seeking declaratory judgment that the Tinedale Proposal constituted an offer to lease which had been accepted by MS Real Estate under the right of first refusal contract, and seeking damages for breach of contrac t. In response, the Foxes sent a letter to MS Real Estate on March 6, 2012, purportedly terminating the right of first re fusal contract. The Foxes' letter indicated that the rig ht of first refusal contract failed to specify the duration of the contract and did not expressly state that it was intended to be perpetual. Thus, according to the Foxes, either pa rty could

terminate the contract after a reasonable time. ¶19 On April 5, 2012, the parties resolved their di spute regarding whether it was the Tinedale Proposal or t he Kavanaugh Lease which constituted an acceptable offer subject to MS RealNo. 2013AP679

9 Estate's right to first lease. They did so by ente ring into a lease under the terms of the Kavanaugh Lease. The Foxes moved for summary judgment on their remaining counterclai m, arguing that the March 6 revocation of the right of first r efusal

contract was valid because the contract was indefin ite and lacked the express language needed to indicate an i ntent it should endure in perpetuity. The circuit court gra nted summary judgment in favor of the Foxes, concluding that the right of

first refusal contract was indefinite as to duratio n and that the revocation by the Foxes was reasonable. ¶20 The court of appeals reversed, concluding that "a right of first refusal to purchase . . . is not ame nable to the general rule of indefiniteness applied by the circu it court." MS Real Estate Holdings, 356 Wis. 2d 307, ¶13. The court of appeals also determined MS Real Estate's failure to exercise the right of first refusal to purchase would constitute a waiver of the right of first lease under the contract. Id., ¶¶30-31. Thus, the court concluded that the duration of the right of

first refusal contract is not indefinite because th e contract terminates, in its entirety, upon the sale of the F ox Land. Id., ¶32. ¶21 The Foxes petitioned this court for review, whi ch we granted on November 13, 2014.

II. STANDARD OF REVIEW ¶22 This case requires us to review a grant of summ ary judgment. "'We review the grant of a motion for su mmary judgment de novo, and apply the methodology specifi ed in Wis.No. 2013AP679

10 Stat. § 802.08. That is, we determine whether ther e is any genuine issue as to any material fact, and if not, which party is entitled to judgment as a matter of law.'" E-Z Roll Off, LLC v. Cnty. of Oneida, 2011 WI 71, ¶15, 335 Wis. 2d 72 0, 800 N.W.2d 421 (citation omitted). ¶23 In doing so, we must interpret the right of fir st

refusal contract between the Foxes and MS Real Esta te and determine whether it is ambiguous as to its duratio n. "Whether a contract is ambiguous is . . . a question of law which we review de novo." Mitchell Bank v. Schanke, 2004 WI 13, ¶46, 268 Wis. 2d 571, 676 N.W.2d 849 (quoting Schmitz v. Gru dzinski, 141 Wis. 2d 867, 871, 416 N.W.2d 639 (Ct. App. 1987)).

III. DISCUSSION A. Rights of First Refusal Defined ¶24 A right of first refusal is a contractual right to be first in line should the opportunity to purchase or lease a property arise. "The right of first refusal 'remai ns in an unripened or suspended state, awaiting the energizi ng spark provided when the condition precedent of intent and offer is met.'" Wilber Lime Prods., Inc. v. Ahrndt, 2003 WI App 259, ¶10, 268 Wis. 2d 650, 673 N.W.2d 339 (quoting Chapm an v. Mut. Life Ins. Co, 800 P.2d 1147, 1152 (Wyo. 1990)). It is "essentially a conditional option dependent upon th e decision or the desire of the landlord to sell [or lease]." La st v. Puehler, 19 Wis. 2d 291, 297, 120 N.W.2d 120 (1963) . Like an option contract, a right of first refusal must be s upported byNo. 2013AP679

11 consideration. 3 E.M. Holmes, Corbin on Contracts § 11.3 (rev. ed. 1996) (hereinafter Corbin). ¶25 However, a right of first refusal is not an opt ion contract. A right of first refusal is a right to buy before or ahead of others, thus, a p reemptive right contract is an agreement containing a ll the essential elements of a contract, the provision s of which give to the prospective purchaser the righ t to buy upon specified terms, but, and this is the important point, only if the seller decides to sell

. It does not give the pre-emptioner the power to com pel an unwilling owner to sell, and therefore is distinguishable from an ordinary option. Edlin v. Soderstrom, 83 Wis. 2d 58, 68, 264 N.W.2d 275 (1978) (citing J.A. Bryant, Jr, Annotation, Pre-emptive Ri ghts to Realty as Violation of Rule Against Perpetuities or Rule Concerning Restraints on Alienation, 40 A.L.R. 3d, 920, 924 (1971)). "The holder of an option can compel a sal e by an unwilling owner. The holder of a right of first re fusal on a piece of land only has the right to receive an offe r to buy the land." Corbin, supra, § 11.3. ¶26 Further, a right of first refusal to purchase o r lease land may be a servitude. 5 A servitude is "a legal device that creates a right or obligation that runs either with land or with an interest in land." Nature Conservancy of Wis., Inc. v. Altnau, 2008 WI App 115, ¶7, 313 Wis. 2d 382, 756 N .W.2d 641

5 While it is unnecessary for the outcome of this ca se to determine whether the right of first refusal contra ct between the Foxes and MS Real Estate is a servitude, we non etheless find the rules governing servitudes useful to our analys is.No. 2013AP679

12 (citing Restatement (Third) of Prop.: Servitudes § 1.1(1) (2000)). Servitudes are subject to the rules again st restraints on alienation. Restatement (Third) of Prop.: Servi tudes § 3.3. ¶27 A restraint on alienation occurs when a propert y owner contracts not to sell the property for a specified amount of time. Corbin, supra, § 11.3. Generally, a right of first refusal is not a restraint on alienation if the pro cedure for exercising the right is reasonable. Id. To determ ine whether a right of first refusal imposes a restraint on alien ation, one must look to the provisions governing the exercise of the right. Restatement (Third) of Prop.: Servitudes § 3.4 cmt. f. Lack of clarity may cause substantial harm by makin g it difficult to obtain financing and exposing potential buyers to threats of litigation. Lengthy periods for exercise of rights of first refusal wil l also substantially affect alienability of the property. Potential buyers will be deterred by the possibility that they may not know for a lengthy period of time whether they will obtain the propert y or be obligated to pay the price. The risks of cha nge in their needs and in financial markets will be greater than most buyers will be willing to accept. Id. However, where the right of first refusal prov ides for purchase on the same terms and conditions as the ow ner receives from a third party, the procedure for exercising th e right is clear, and the time for exercising the right when i t arises is reasonably short, its practical effect on alienatio n is de minimus. Id. Thus, to determine whether the time for exercising the right of first refusal is reasonable , one must look to when the right is triggered. A right of fi rst refusal is triggered when "the energizing spark" of "intent and offer isNo. 2013AP679

13 met," not when the contract is first created. Wilb er Lime Prods., 268 Wis. 2d 650, ¶10 (citation and quotatio n omitted). ¶28 When a right of first refusal provides for purc hase on the same terms and conditions as an acceptable offe r, provides a clear procedure for exercising the right, and provi des a reasonable time for exercising the right, it does n ot operate to prohibit or restrain the sale of property. Rather, the right of

first refusal contract bestows on the holder the ri ght to preempt a third party’s purchase when that third pa rty has made an offer the owner will accept. Corbin, supra, § 11.3. Where the procedure is clear and the time to exercise the right is reasonable, a right of first refusal "provides a po ssible buyer who is constantly available." Bruns v. Rennebohm D rug Stores, Inc., 151 Wis. 2d 88, 99, 442 N.W.2d 591 (Ct. App. 1989). ¶29 If the property owner receives an acceptable of fer, the owner "has the power to create a privilege to s ell by merely offering to sell to [the holder of the right of fir st refusal]." Corbin, supra, § 11.3. If the holder accepts, he purchases the property. If the holder declines, the owner may ac cept the buyer’s offer. Accordingly, "a transaction exclusi vely contractual in character, such as a right of first refusal," cannot realistically be said to encumber specific p roperty. 10 Powell on Real Property § 72.07 (Michael Allan Wolf ed., LexisNexis Matthew Bender). This discussion makes clear that, under a right of first refusal contract, landowners such as the Foxes remain free to do with their property as they wish. The holder of a right of first refusal cannot force lan downers toNo. 2013AP679

14 sell or lease their property unless they freely cho ose to do so. Even then, landowners may condition such sale or le ase on terms that are acceptable to them. In other words, lando wners such as the Foxes remain in total control of their property and cannot be forced to act against their will under a right o f first

refusal contract. B. Right of First Refusal Contracts That Use a Trig gering Event

That is Uncertain to Occur Are Not Indefinite as to Duration. ¶30 By their nature, right of first refusal contrac ts often contemplate a level of uncertainty because su ch contracts rely on triggering events——usually a landowner’s de cision to sell——which may or may not occur. See Wilber Lime Prods., 268 Wis. 2d 650, ¶10. The use of an event to determine the duration of a right of first refusal contract renders the du ration of the contract sufficiently definite under Wisconsin law. Schneider v. Schneider, 132 Wis. 2d 171, 176, 389 N.W.2d 835 (Ct. App. 1986). The Foxes do not argue that the procedures for MS Real Estate to exercise its rights are unreasonable, but rather that

the duration of the entire contract is indefinite. Thus, the question here is whether the uncertainty of when—or even if—the triggering event will occur offends Wisconsin’s pol icy disfavoring perpetual contracts. It does not. ¶31 We begin our analysis, as we must, by noting th at Wisconsin courts do not favor perpetual contracts. We are "reluctant to interpret a contract as providing for a perpetual contractual right unless the intention of the contr acting parties to provide for the same is clearly stated." CapitalNo. 2013AP679

15 Invs., Inc. v. Whitehall Packing Co., 91 Wis. 2d 17 8, 193, 280 N.W.2d 254 (1979). When the time that a contract i s to endure is indefinite, this court will imply a reasonable t ime for the duration of the contract. Farley v. Salow, 67 Wis. 2d 393, 402, 227 N.W.2d 76 (1975). However, we do not require p arties to express duration in temporal terms in order to avoi d indefiniteness. Rather, parties are free to identi fy triggering events that give rise to termination of the contrac t in one form or another. Schneider, 132 Wis. 2d at 176. ¶32 The Foxes argue that the uncertainty of a trigg ering event, in this case the sale of the Fox Land, rende rs the duration for which the right of first refusal contr act is to endure indefinite, and therefore violates Wisconsin ’s policy disfavoring perpetual contracts. The Foxes assert that (a) because the duration of the contract is indefinite, and (b) it contains no express language stating that it is int ended to be perpetual, we should imply a reasonable time for pe rformance, after which, the contract is terminable at will by either party. Accordingly, in the Foxes view, the court of appeal s exceeded its authority by concluding the contract terminated upon sale. ¶33 We disagree. A specified triggering event, tho ugh uncertain to occur, may render a right of first ref usal contract sufficiently definite and establish the duration of the right. Id. In Schneider, the court of appeals considered whether an agreement between two brothers that restricted the sale of property held by them as tenants in common was inde finite as to duration because it contained no express amount of time it wasNo. 2013AP679

16 to endure, thereby violating the restriction on par tition agreements that exceed thirty years under Wis. Stat

. § 842.02(1). Id. at 175. The court concluded that the agreement was not indefinite because either of two events——the death of one of the brothers or operation of a righ t of first refusal provision in the agreement——would allow the land to be partitioned. Id. at 176. ¶34 The Foxes argue that, in Schneider, it is the f irst event the court listed, death, that made the durati on of the

contract definite because death is an event certain to occur. The Foxes' reading of Schneider does not persuade u s. The court in Schneider provided two independent reasons for c oncluding that the duration of the contract was sufficiently definite. Schneider, 132 Wis. 2d at 176. The first, death, w as certain to occur, though impossible to predict. Id. The seco nd, the exercise of the right of first refusal, though unce rtain to occur, depended on one of the brothers seeking to s ell his interest in the land. Id. The brothers had signed an agreement that required the sibling who wished to sell his in terest in the land to offer it to his brother first. Id. Throug h the operation of the right of first refusal agreement, either brother could sell his interest in the property at any time. Id. Thus, either death or the sale of the property was sufficient to establish the definiteness of the con tract. ¶35 The court’s conclusion in Schneider is consiste nt with the form and function of rights of first refusal. As we explained above, a right of first refusal contract operates in aNo. 2013AP679

17 manner similar to a conditional option contract, th ough it is not an option contract. See Last, 19 Wis. 2d at 29 7; Nature Conservancy of Wis., 313 Wis. 2d 382, ¶7; Corbin, supra, § 11.3. Under a right of first refusal contract, the right to purchase property lies dormant until it is awakened by the o ccurrence of a specified triggering event. Wilber Lime Prods., 268 Wis. 2d 650, ¶10. Unless otherwise specified by th e parties, a right of first refusal expires when the triggering event occurs and the holder chooses to either exercise or waive the right. See Cipriano v. Glen Cove Lodge #1458, B.P.O.E., 80 1 N.E.2d 388, 392 (N.Y. 2003) ("The holder of a right of first re fusal must be given the opportunity to exercise the preemptive ri ght, but the right is extinguished when the contract with the th ird party expires or is abandoned."); Corbin, supra, § 11.3. Accordingly, so long as the right of first refusal clearly ident ifies a triggering event, whether certain or uncertain to o ccur, it is

definite as to duration. ¶36 Because we hold that a right of first refusal c ontract is definite as to duration when it specifies an eve nt that triggers the right, even when the triggering event is not certain to occur, we must now interpret the right o f first

refusal contract between the Foxes and MS Real Esta te to determine the triggering event. C. The Right of First Refusal Contract Terminates U pon Sale of

the Fox Land. ¶37 To determine whether the right of first refusal

contract between the Foxes and MS Real Estate is in definite, weNo. 2013AP679

18 must interpret the document. Our goal in interpret ing contracts is to determine and carry out the parties' intentio ns. See Wilson Mut. Ins. Co. v. Falk, 2014 WI 136, ¶23, 360 Wis. 2d 67, 857 N.W.2d 156. "Contract language is construed ac cording to its plain or ordinary meaning, . . . consistent wit h 'what a reasonable person would understand the words to mea n under the circumstances.'" Tufail v. Midwest Hospitality, LL C, 2013 WI 62, ¶28, 348 Wis. 2d 631, 833 N.W.2d 586 (internal citations omitted). If the terms of a contract are plain and unambiguous,

we construe it as it stands. Gottsacker v. Monnier , 2005 WI 69, ¶22, 281 Wis. 2d 361, 697 N.W.2d 436. "However, wh ere contractual language is reasonably susceptible to m ore than one meaning, that language is ambiguous." Nature Conse rvancy of Wis., 313 Wis. 2d 382, ¶6. ¶38 "The general rule as to construction of contrac ts is that the meaning of particular provisions in the co ntract is to

be ascertained with reference to the contract as a whole." Tempelis v. Aetna Cas. & Sur. Co., 169 Wis. 2d 1, 9 , 485 N.W.2d 217 (1992). "When interpreting an ambiguous contract provision, we must reject a construction that rende rs an unfair or unreasonable result." Gottsacker, 281 Wis. 2d 3 61, ¶24. We "interpret contracts to give them 'common sense' an d 'realistic' meaning." Betz v. Diamond Jim's Auto Sales, 2014 W I 66, ¶68, 355 Wis. 2d 301, 849 N.W.2d 292 (Abrahamson, C.J., dissenting). "[A]mbiguities are resolved against the drafter." Marlowe v. IDS Prop. Cas. Ins. Co., 2013 WI 29, ¶48, 346 Wis. 2d 450, 828

N.W.2d 812.No. 2013AP679

19 ¶39 Read in isolation, the two right of first refus al provisions in the contract between the Foxes and MS Real Estate are not ambiguous. Section one of the contract, wh ich contains the Right of First Refusal to Purchase provision, s tates: Fox grants and conveys to Tidy-View a first right t o purchase the Property, or any part thereof, for the same price and on the same terms which Fox is willi ng to transfer such Property to another party. Prior to transfer, Fox shall deliver to Tidy-View a written copy of the Offer, which Fox is willing to accept. Tidy-View shall then have 15 (fifteen) days in whic h to accept or reject the Offer according to its pric e, terms and conditions. If the Offer is accepted, th e transfer shall be closed in accordance with the Off er with Tidy-View as purchaser. If the Offer is rejected, Fox may complete the sale in strict compliance with the Offer. If the sale is not clos ed, this first right of refusal shall again take effect

. (Emphasis added). ¶40 By its terms, this provision terminates upon th e sale

of the Fox Land. There is no other reasonable inte rpretation. If the Fox Land is sold to MS Real Estate, then the re is no longer a need for the provision. If the Fox Land i s sold to a third-party, the right of first refusal to purchase does not reattach. MS Real Estate would waive its right of first refusal to purchase if and when the Fox Land is sold to a t hird-party, thus extinguishing the right. ¶41 Similarly, the Right of First Lease provision i s unambiguous when read in isolation. The section co ntains two provisions, which read: 2.1 Leasing Rights. Fox grants and conveys to Tidy

View a first right to lease the Property or any par t thereof, for the same price and on the same termsNo. 2013AP679

20 which Fox is willing to Lease such Property to anot her party. Prior to execution of any Lease, Fox shall deliver to Tidy-View a written copy of the Lease, which Fox is willing to accept. Tidy-View shall th en have 15 (fifteen) days in which to accept or reject the Lease according to its price, terms and conditions. If the Lease is accepted, Tidy-View sha ll be obligated to make all payments in accordance wit h the Lease with Tidy-View as Lessee. If the Lease i s rejected, Fox may execute the Lease as Lessor with the other party as Lessee. If the Lease is not execute d, the first right to lease shall again take effect. 2.2 Continuing Rights. This section 2 right shall continue for any subsequent renewal of a Lease with another party or upon the entering into of a new Le ase with any other party. It is specifically intended that this leasing right shall not extinguish unless waived by Tidy-View. ¶42 Standing alone, the plain language of the right of first lease is amenable to only one reasonable inte rpretation: if the Foxes desire to lease their land, MS Real Es tate must be given the first opportunity. Further, this right i s expressly intended to continue beyond the provisions of any s ingle lease term and terminates only upon waiver by MS Real Est ate. ¶43 The fact that the right of first refusal provis ions of the contract are unambiguous when read in isolation does not end the inquiry. Contractual provisions must be interp reted within the context of the contract as a whole. Tempelis, 169

Wis. 2d at 9. As we have noted within the context of insurance policies, provisions that are unambiguous standing alone may be ambiguous in the context of the whole contract. Se e Md. Arms Ltd. P'ship v. Connell, 2010 WI 64, ¶39, 326 Wis. 2 d 300, 786 N.W.2d 15. Here, the fourth section of the contrac t, titledNo. 2013AP679

21 Binding Effect, creates ambiguity as to the duratio n of the

contract. ¶44 The Binding Effect provision states that the ag reement "shall be binding upon the respective parties, thei r heirs, personal representatives, successors in interest an d assigns." This section creates at least two reasonable interp retations regarding the duration of the contract. The first is that the contract is intended to be perpetual. The second i s that a sale under the Right of First Refusal to Purchase provis ion constitutes waiver under the Right of First Lease p rovision, thus terminating the contract. ¶45 We are reluctant to find a perpetual contractua l right unless the contract language evidences that the par ties clearly intended the contract to be perpetual. Capital Inv estments, 91 Wis. 2d at 193. However, the intent to create a pe rpetual contract does not require the parties to use magic words. If the contract language indicates that they intend th e contract to be continual, a court may find a perpetual contract . Here, the Binding Effect provision can be read to create a pe rpetual

contract. The use of the term "successors in inter est" suggests that the parties intended the contract to be perpet ual. This is so because if the right of first refusal contract i s binding on all of the Foxes' successors in interest, then it w ould be binding on any third-party who purchased the Fox La nd. Such an interpretation would give MS Real Estate a permanen t right ofNo. 2013AP679

22 first refusal to lease regardless of who owns the F ox Land. 6 Thus, MS Real Estate would have a right of first le ase to the Fox Land that is enforceable against future owners of the property, assuming it did not exercise its right of first refusal to purchase under section one and did not s eparately waive its right of first lease under section two. ¶46 This is not the only reasonable interpretation of the contract, however. The contract can also be read t o terminate upon the sale of the Fox Land to a third-party. Un der this reading, the extent of the Binding Effect provision is limited by the terms of the right of first refusal provisio ns. As we have explained, under the Right of First Refusal to Purchase provision, MS Real Estate's right to purchase termi nates upon sale of the Fox Land, whether the sale is to MS Rea l Estate or a third-party. In addition, according to Section 2.2 of the Right of First Lease provision, MS Real Estate's lease ri ghts "shall not extinguish unless waived." The contract does n ot define what constitutes waiver, and because waiver is not defined within the contract, we give the term is its plain or ordinary meaning. Tufail, 348 Wis. 2d 631, ¶28. ¶47 Waiver is defined as "the voluntary relinquishm ent or abandonment——express or implied——of a legal right o r advantage."

6 This interpretation would not create a perpetual r ight of first refusal to purchase, however. This is becaus e that provision in the contract clearly states that the " first right of refusal shall again take effect" only in the eve nt a sale to a third-party does not close.No. 2013AP679

23 Black’s Law Dictionary 1717 (9th ed. 2009). Thus, the terms of the contract provide that the right of first lease is waived when MS Real Estate abandons a legal right or advan tage under the contract. In this case, that can mean only aba ndonment of the right to purchase. As the court of appeals cor rectly noted, if waiver applied solely to the right to lease, the n the Right of First Lease provision would be internally incons istent. MS Real Estate Holdings, 356 Wis. 2d 307, ¶30. This i s so because Section 2.2 explicitly states that the right of fir st lease continues for any subsequent lease, whether entered into by MS Real Estate or a third-party. For such a situation to occur, MS Real Estate would have declined, or "voluntarily re linquished," its first right to lease under Section 2.1. Thus, waiver must mean the relinquishment of a different right under the contract, and the only other right granted to MS Real Estate is the first right to purchase. Accordingly, Section 2.2, read in the context of the contract as a whole, indicates that waiver occurs when MS Real Estate refuses to exercise its right t o purchase the Fox Land and allows a third-party to purchase t he property. 7

7 Another reason that "waiver" in Section 2.2 cannot refer to the first right to lease is that it would be red undant. It is well-settled that "[a] construction which gives reasonable meaning to every provision of a contract is prefera ble to one leaving part of the language useless or meaningless ." Maas by Grant v. Ziegler, 172 Wis. 2d 70, 79, 492 N.W.2d 62 1 (1992). The first sentence of Section 2.2 states that the f irst right to lease "shall continue for any subsequent renewal of a Lease with another party or upon the entering into of a new Le ase with any other party." The plain meaning of this provision is that the first right to lease is recurring, unlike the first right to purchase. In essence, MS Real Estate can waive its first right (continued)No. 2013AP679

24 ¶48 We conclude that the second "waiver interpretat ion" is the more reasonable and commonsense reading of the document as a whole. See Betz, 355 Wis. 2d 301, ¶68. By conclud ing that waiver under the Right of First Lease provision occ urs when MS Real Estate declines to exercise the right of first refusal to purchase, the waiver interpretation gives full effe ct to each provision of the contract. Under this waiver inter pretation, the right of first refusal to purchase remains in e ffect until

the consummation of a sale of the Fox Land. Furthe r, the right of first lease continues, arising each time a lease expires, until it is waived by MS Real Estate's choice not t o exercise its right of first refusal to purchase. Finally, u nder the waiver interpretation, the Binding Effect provision remains enforceable, binding subsequent generations of the Fox family that will inherit the Fox Land until the property i s sold. ¶49 The parties' actions also indicate that the wai ver interpretation is consistent with their intent. Wh en a contract is ambiguous, the court may look beyond the four co rners of the

document and consider extrinsic evidence that demon strates the parties' intent. Betz, 355 Wis. 2d 301, ¶39. Here , the parties' behavior under the contract provides addit ional support

to lease for every lease as long as the contract is in force. There is no need for MS Real Estate to affirmativel y waive this right because it will not suffer any ill-effects fo r failure to do so. Thus, if we were to read the waiver provisi on in Section 2.2 as applying only to the right of first lease, t he waiver provision would be superfluous.No. 2013AP679

25 for this waiver interpretation. When the Foxes sen t MS Real Estate notice that it had received an offer to purc hase 37.4 acres of the Fox Land on October 4, 2006, MS Real E state notified the Foxes by letter that it did not wish t o purchase the land. Enclosed with the letter was an agreemen t entitled "Release of Parcel From Right of First Refusal." M S Real Estate indicated that the enclosed agreement was a waiver of all its rights to the 37.4 acres under the right of first r efusal contract. The following January, when executing a new five year lease, the parties indicated, by hand written adden dum, that if any part of the Fox Land was sold during the lease term, the rent would be adjusted accordingly. This addendum also demonstrates that the parties intended a sale execu ted under the Right of First Refusal to Purchase provision to con stitute waiver under the Right of First Lease provision. ¶50 The waiver interpretation also satisfies the ru le that we construe any ambiguities in the document against the drafting party. Marlowe, 346 Wis. 2d 450, ¶48. A perpetual interpretation of the contract would give MS Real E state a right of first lease that ran with the land. Under the p erpetual interpretation, MS Real Estate, the drafter of the document, would benefit from a perpetual right of first lease . If we adopted such a reading, it would place MS Real Esta te first in line anytime the land would be leased, giving it a clear advantage over any other interested third-party. C onstruing the contract against MS Real Estate requires us to adop t the waiver interpretation.No. 2013AP679

26 ¶51 Finally, the right of first refusal contract at issue here is not a restraint on the Foxes' ability to al ienate the property. A restraint on alienation occurs when a property owner contracts not to sell the property for a spec ified amount of time. Corbin, supra, § 11.3; see also Wis. Stat. § 700.16(2) (2014-15) ("The power of alienation is suspended wh en there are no persons in being who, alone or in combination wi th others, can convey an absolute fee in possession of land, o r full ownership of personalty."). As discussed above, wh ere the right of first refusal provides for purchase on the same terms and conditions as the owner receives from a third party , the procedure for exercising the right is clear, and th e time for exercising the option when it arises is reasonably short, its practical effect on alienation is de minimus. Corb in, supra, § 11.3. If MS Real Estate desires to purchase the Fox Land, it must be willing to meet the terms and conditions of an offer the Foxes deem acceptable. The procedure for exercisin g the first right to purchase is clear under the contract. If the Foxes receive an offer they will accept, they must delive r a written copy of the offer to MS Real Estate. MS Real Estat e then has 15 days to determine whether to purchase the property on those same terms. We conclude that 15 days is reasonably shor t such that potential buyers will not be deterred by the possib ility that they may not know for a lengthy period whether they will obtain the property. ¶52 MS Real Estate's opportunity to exercise its ri ght of first refusal is completely dependent upon the acti ons of theNo. 2013AP679

27 Foxes. The Foxes hold all the cards because they a re not required to sell or lease their land, and they may use their land however they wish. They could entertain a tho usand offers to sell or lease the Fox Land, and cast each one as ide without consequence under the contract. In the event an of fer for sale or lease is made that they are willing to accept, a ll that is required is that they give MS Real Estate the oppor tunity to accept or reject the terms of the offer that they f ind acceptable. MS Real Estate may not negotiate for m ore favorable

terms. The Foxes alone determine what offer is or is not acceptable. Thus, the right of first refusal contr act is not a

restriction on alienation and continues to be enfor ceable.

IV. CONCLUSION ¶53 We hold that a right of first refusal contract is definite as to duration when it specifies an event that triggers the right and requires the right holder to either e xercise or waive the right within a specified period of time t hereafter, even if the triggering event is not certain to occu r. Therefore, the right of first refusal contract at i ssue here is not terminable at will after a reasonable period of time. Rather, by the terms of the contract, the right of first refusal continues until there is a sale of the property, ei ther to MS Real Estate or to a third party in the event that M S Real Estate declines to exercise its right of first refusal, th ereby waiving the right. Accordingly, the decision of the court of appeals is

affirmed.No. 2013AP679

28 By the Court.- The decision of the court of appeals is

affirmed.No. 2013AP679

1