## Facts

- Diane Cultum contacted Heritage House Realtors, Inc. and worked with its salesperson, Yvonne Ramey, to buy a home owned by Arthur and Paula Smith.
- Cultum instructed Ramey that she wanted a home inspection and the ability to withdraw her offer based on the inspection.
- Ramey prepared an earnest-money purchase and sale agreement on a standardized printed form drafted and approved by attorneys.
- At Cultum’s request, Ramey added an inspection contingency clause to the form.
- After inspection revealed problems, Cultum sought to rescind, believing the contingency allowed withdrawal based on her subjective satisfaction.
- The sellers refused to rescind, asserting the clause required an objectively unsatisfactory inspection.
- Heritage retained Cultum’s earnest money for about six months before returning it.
- Cultum sued Heritage for damages for loss of use of the earnest money and for an injunction barring Heritage from allegedly unauthorized law practice in preparing such clauses.

## Issues

1. Whether a real estate salesperson’s completion of an earnest-money agreement on an attorney-approved form, including an inspection contingency clause, constitutes unauthorized practice of law under RCW 2.48.170–.190.
2. Whether a broker may be civilly liable for negligent drafting or for failing to follow a client’s explicit instructions when preparing such a contingency clause.
3. Whether the alleged unauthorized practice constitutes a per se violation of the Consumer Protection Act and supports broad injunctive relief and fee shifting.

## Decision

- The Washington Supreme Court reversed the trial court’s conclusion that Heritage’s completion of the form and contingency clause was unauthorized practice of law.
- The court held that although such document preparation is within the “practice of law,” it is not “unauthorized” when done by licensed real estate professionals using standardized, attorney-approved forms within defined limits.
- The permanent injunction barring Heritage from completing or preparing clauses in real estate agreements was dissolved.
- The court rejected the Consumer Protection Act theory to the extent it depended on labeling this conduct as unauthorized practice of law.
- The court recognized potential civil liability for negligent drafting or failure to follow the client’s instructions and remanded, including for determination of contractual attorney’s fees rather than Consumer Protection Act-based fees.

## Legal Principles

- Preparing instruments that secure legal rights is generally the practice of law, but Washington permits a limited exception for licensed real estate brokers and salespersons.
- Under this exception, brokers may complete standardized, attorney-approved real estate purchase and sale forms and use routine, simple clauses incident to the transaction.
- Brokers may not use this exception to draft complex, specially tailored legal provisions that amount to legal counseling beyond routine brokerage practice.
- When brokers undertake permitted document-preparation tasks with legal effect, they must exercise reasonable professional care and may be held liable in negligence or related civil theories for drafting errors or failure to follow client instructions.
- Conduct that falls within the permitted exception cannot, on that basis alone, serve as the predicate illegality for per se Consumer Protection Act liability or sweeping injunctive bans on routine form completion.

## Conclusion

Washington allows licensed real estate professionals to complete attorney-approved transaction forms, including routine contingencies, without committing unauthorized practice of law; however, brokers who perform this work assume corresponding duties of care and can be liable for negligent drafting, and broad Consumer Protection Act remedies and injunctions cannot rest solely on characterizing such routine form completion as unauthorized law practice.


Cultum v. Heritage House Realtors, Inc., 103 Wash. 2d 623, 694 P.2d 630 (Wash. 1985)