Uploaded March 2025 | Updated September 2026, 2 weeks ago
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Gerruth Realty Co. v. Pire
Wisconsin Supreme Court
115 N.W.2d 557 (1962)
In Gerruth Realty versus Pire, we'll see whether an ambiguous financing clause in a contract to buy real estate can void the entire contract.
Walter Pire signed an agreement to purchase Gerruth Realty's property for thirty thousand dollars.
Pire gave Gerruth a five thousand dollar promissory note as a down payment, which was payable at closing. The remaining twenty five thousand dollars of the purchase price would be paid in cash. The agreement also conditioned the sale on Pire buying an adjacent property for forty thousand dollars. The agreement held that the closings for both properties had to occur simultaneously.
Pire believed that he wouldn't have any difficulty in securing financing for the purchases, but Pire insisted that the agreement contain a financing clause. The clause stated, quote, this offer to purchase is further contingent upon the purchaser obtaining the proper amount of financing, unquote.
The clause didn't define a specific dollar amount as the proper amount of financing.
Pire attempted to borrow money to purchase the properties from a bank, but the bank denied Pire's loan request. Later, Gerruth and a third party offered to loan Pire forty five thousand dollars, but Pire refused their offer. As a result, Pire didn't purchase the properties because Pire couldn't obtain financing.
Gerruth sued Pire to recover the five thousand dollar promissory note that Pire gave as a down payment.
Pire moved to dismiss the complaint. The trial court found that the financing clause was a condition precedent to the performance of the contract for Pire. The court found that Pire had acted in good faith when he attempted to obtain financing for the agreement, but ultimately, Pire couldn't obtain the necessary funds to purchase the properties.
As a result, the trial court granted Pire's motion to dismiss. Gerruth appealed to the Wisconsin Supreme Court.
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Get more case briefs explained with Quimbee. Quimbee has over 42,700 case briefs (and counting) keyed to 988 casebooks ► quimbee.com/case-briefs-overview
Gerruth Realty Co. v. Pire
Wisconsin Supreme Court
115 N.W.2d 557 (1962)
In Gerruth Realty versus Pire, we'll see whether an ambiguous financing clause in a contract to buy real estate can void the entire contract.
Walter Pire signed an agreement to purchase Gerruth Realty's property for thirty thousand dollars.
Pire gave Gerruth a five thousand dollar promissory note as a down payment, which was payable at closing. The remaining twenty five thousand dollars of the purchase price would be paid in cash. The agreement also conditioned the sale on Pire buying an adjacent property for forty thousand dollars. The agreement held that the closings for both properties had to occur simultaneously.
Pire believed that he wouldn't have any difficulty in securing financing for the purchases, but Pire insisted that the agreement contain a financing clause. The clause stated, quote, this offer to purchase is further contingent upon the purchaser obtaining the proper amount of financing, unquote.
The clause didn't define a specific dollar amount as the proper amount of financing.
Pire attempted to borrow money to purchase the properties from a bank, but the bank denied Pire's loan request. Later, Gerruth and a third party offered to loan Pire forty five thousand dollars, but Pire refused their offer. As a result, Pire didn't purchase the properties because Pire couldn't obtain financing.
Gerruth sued Pire to recover the five thousand dollar promissory note that Pire gave as a down payment.
Pire moved to dismiss the complaint. The trial court found that the financing clause was a condition precedent to the performance of the contract for Pire. The court found that Pire had acted in good faith when he attempted to obtain financing for the agreement, but ultimately, Pire couldn't obtain the necessary funds to purchase the properties.
As a result, the trial court granted Pire's motion to dismiss. Gerruth appealed to the Wisconsin Supreme Court.
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