Given the upcoming changes to several of the WB forms, mandated for use on July 1, 2022, this month’s hotline article focuses on frequently asked questions to the WRA Legal Hotline about these forms.  

WB-40 Amendment to Offer to Purchase 

The buyer client wants multiple items from the home inspection results to be included on an amendment. The problem is, there is not enough room on the amendment to list all the items on the amendment identifying what and how the buyer wants the items addressed. Is there an addendum that can be used to include all the items? 

The correct way to include provisions that do not fit on the one-page WB-40 Amendment to Offer to Purchase form is to include an addendum to the amendment. The addendum will be incorporated by reference at line 31 of the 2022 version of the WB-40 Amendment. The addendum will be identified on line 31. Blank addenda are available in Transactions (zipForm Edition) for purposes such as this. The agent would name the addendum, such as “Addendum 1 to the Amendment.” Alternately, the addendum name could use the address or party initials, then reference the amendment on line 31 of the 2022 WB-40, thereby incorporating all the extra terms in the addendum into the WB-40. 

The buyer’s agent created an amendment for an offer to purchase, and that amendment included a deadline. The buyer signed the amendment, and the buyer’s agent submitted the amendment to the listing agent. One seller signed the amendment within the deadline time frame, and the other seller signed after the deadline. Is this amendment valid?

In order to modify the terms of the offer, all the parties required to sign the transaction documents must sign the amendment and have it delivered back to the party that provided the amendment before the time frame noted on line 34 of the 2022 WB-40. If this deadline is not met, then the parties can choose to execute a new amendment.

WB-45 Cancellation Agreement and Mutual Release  

Four sellers have an accepted offer. One seller is local, and the other three are in different parts of the country. The transaction is falling apart, and the sellers are in agreement with the buyer’s request for the earnest money. The buyer initiated the WB-45 Cancellation Agreement and Mutual Release (CAMR). Must all sellers sign the same CAMR? 

It is possible for the sellers to use what is known as counterparts. So long as the sellers each sign an identical CAMR, the signatures can be on different pages. Wisconsin cases recognize that contracts may be signed in counterparts — that is, no single piece of paper has all the original signatures, but taken together, all parties have executed the same contract. It is the assent of the parties to the same terms that is critical. The signed writing evidences this assent, and courts try to effectuate the parties’ intent. If, however, one of the parties has modified the CAMR, there would no longer be identical documents to sign as counterparts. 

WB-44 Counter-offer

The buyer and seller have been negotiating, and the third counter-offer was accepted, signed and delivered. The original offer included Addendum S and Addendum A. The second counter-offer removed the Addendum A. There was no mention of Addendum A in the third counter-offer. Is the Addendum A, which was not signed by the seller, a part of the offer? 

Yes. The terms of the original offer with any accompanying addenda plus the modifications in the final counter-offer reflect the agreement of the parties. Provided the Addendum A was incorporated by reference in the offer, it becomes part of the contract. The addenda do not need to be signed to be part of the offer.

The WB-44 Counter-Offer provides that the counter-offer does not include terms and conditions from a previous counter-offer unless they are incorporated by reference or restated in the final counter-offer. This allows a counter-offer to refer to select terms of a prior counter-offer and incorporate them into the new counter-offer by reference to the date and number of the counter-offer, the line numbers, and/or item numbers without re-writing those select terms. See lines 47-50 of the 2022 WB-44 below. If there is no such reference back to the second counter-offer, then the final counter-offer that is signed reflects the contract between the buyer and the seller.

NOTE: Provisions from a previous Counter-Offer may be included by reproduction of the entire provision or incorporation by reference. Provisions incorporated by reference may be indicated in the subsequent Counter-Offer by specifying the number of the provision or the lines containing the provision. In transactions involving more than one Counter-Offer, the Counter-Offer referred to should be clearly specified.

The seller countered the buyer’s original offer, and in response, the buyer countered. However, the buyer’s agent filled out that document as “counter-offer #1.” Is that the correct way to number the second counter-offer?

No. Counter-offers should be numbered sequentially, regardless of who initiates the counter-offer. For example, if the seller drafts a counter-offer in response to an offer, that is counter-offer #1. If the buyer then initiates a counter-offer to the seller, that is counter-offer #2.

Either the buyer or the seller can initiate a new counter-offer at any time. The numbering of counter-offers is consecutive, regardless of who initiates the next counter-offer.

Can/should a counter-offer be used to change the binding acceptance deadline in an offer?

It is not necessary to change a binding acceptance deadline if a seller wants more time to consider additional offers or for any other reason. If the binding acceptance deadline passes and the seller wants to respond, the original offer can be revived by a counter-offer being delivered to the buyer, addressing substantive terms of the original offer that the seller wants to counter, and setting a deadline by which the buyer may accept.

Using a counter-offer is not really a prudent or effective way to change the binding acceptance date stated in an offer, particularly if the seller wants to counter other terms in that offer or wants to preserve their right to reject the offer outright. If a seller issues a counter-offer attempting to change the binding acceptance deadline and the buyer accepts and delivers, a contract would be formed. By issuing a counter-offer to only change the binding acceptance deadline, the seller has accepted all the other terms in the offer.

Can a counter-offer “revive” an offer that has been previously rejected?

Yes. The counter-offer is essentially a new offer that incorporates many, if not most, of the terms and provisions of the previous offer. The counter-offer may be written after expiration of the binding acceptance period in the offer and may be used even if the seller rejected the offer. The only relevant deadline in the counter-offer is the acceptance date set forth in the counter-offer.

WB-41 Notice Relating to Offer to Purchase  

A broker is working with a seller, and the seller wants to issue a termination notice based on a late loan commitment. Does the listing agent, who drafted the notice, complete lines 35-37 of the 2022 notice? The listing agent will be emailing the notice to the cooperating broker because the cooperating broker’s email is included at line 570 of the offer as the email address for the buyer.

Lines 35-37 of the 2022 WB-41 Notice Relating to Offer to Purchase are to be filled out by the person who delivers the notice. Depending on the situation, that might be a party, a listing agent or a cooperating licensee. The question is who delivered the notice by an authorized method per the offer. If the cooperating broker’s email address is used at line 570 of the offer and the listing agent emails the notice to that email address, the listing agent will complete lines 35-37 of the notice.  
 
The buyer issued a notice of defects after receiving the written inspection report. Before the seller had given notice electing to cure or make the offer null and void, the buyer had second thoughts and does not want to lose the property if the seller elects not to cure. Can a notice of defects be withdrawn? 

Per the 2022 WB-41 Notice Relating to Offer to Purchase on lines 30-31, “Once delivered, a Notice cannot be withdrawn by the Initiating Party without the written consent of the Receiving Party.” Therefore, if the buyer has delivered a Notice of Defects to the seller, then the buyer cannot withdraw that notice unless the seller consents. If the seller is agreeable to the buyer withdrawing the notice, then the parties could sign an amendment documenting such.

Additional information

See the WRA’s forms update resource webpage: www.wra.org/FormsUpdate.