Although grammar has long established its position in ESL curricula, discrepancies between forms used in actual speech and their prescribed counterparts are problematic. ESL textbooks sometimes fail to reflect authentic grammar use, thus raising questions as to how nonstandard usages should be treated in the classroom. This paper describes native English speakers’ usage of would have in past counterfactual if- and wish-clauses in spoken discourse and examines acceptability judgments of this usage in an informal written dialogue. In this study the would have variant was widely used and accepted by the participants. The paper argues that ESL pedagogical materials should descriptively address the would have usage, which is potentially unconscious even among ESL instructors. The paper further explores plausible hypotheses accounting for the prevalent and stable usage of would have in violation of prescriptive rules. Practical suggestions are also presented regarding testing policies involving the would have usage on standardized tests.