Contracts comparison
Offer, counteroffer or multiple offers: track the proposal still open
Name the person making the proposal and the person who can accept it. Then follow the next communication. With competing buyers, keep a separate timeline for each offer rather than combining terms from different negotiations.
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The short answer
An offer proposes a bargain that the identified offeree can accept under its terms. A counteroffer proposes a different bargain; a conditional response is not acceptance merely because its author calls a change minor. A genuine inquiry need not reject the offer. Multiple offers are separate proposals competing for consideration. They do not automatically create an auction, require the highest price to win or authorize acceptance of incompatible contracts.
Reviewed for October 2026. PSI places offer and acceptance within national V.A and multiple offers within V.C. Contracts accounts for 19 of the 100 scored national broker questions, not a separate quota for this page. The examples stipulate their terms, communication rules and relevant legal requirements. They do not decide a private signature, withdrawal, delivery, attorney-review or priority dispute.
Five steps for an offer timeline
- Identify the exact proposal and its parties. Write the terms, offeree and deadline. Check whether it is actually an offer, a request for proposals or a negotiation statement. A heading or advertisement alone does not decide intent to be bound.
- Classify the response. Is the person accepting the invited terms, proposing a different bargain, asking an optional question or rejecting? A question mark does not make a demand an inquiry. Conversely, a tentative request does not necessarily condition assent.
- Update the roles and status. A seller countering a buyer becomes the counterofferor; the buyer becomes the new offeree. Check effective rejection, withdrawal, lapse or renewal under the actual rules. A rejected proposal does not automatically return when the parties change their minds.
- Confirm the required form, authority and timing. A signature, sent email and received notice can be different events. Apply the actual method and deadline along with relevant writing and electronic-agreement requirements. Do not assume every platform timestamp or every dispatch settles effectiveness.
- Keep competing proposals and client duties separate. Present offers as required, protect confidential information and identify any same-agent contemporaneous-offer disclosure. The client compares lawful terms. A request for improved offers, an escalation provision and a backup contract each need their own terms.
| Communication or event | Question to ask | Main distinction |
|---|---|---|
| Offer | Does this definite proposal invite acceptance that completes the stated bargain? | A negotiation invitation can ask for offers instead |
| Acceptance | Was the open proposal accepted as invited, with required form, authority and effective communication? | Signing while conditioning assent on a change is not that acceptance |
| Counteroffer | Is the response proposing a substituted bargain? | Track the new offer and the reversed roles |
| Inquiry | Is a possible change being explored without conditioning assent or rejecting? | Wording, context and any existing review clause matter |
| Rejection | Has the offeree effectively declined? | Different from the offeror withdrawing |
| Revocation | Has the offeror effectively withdrawn an offer still subject to withdrawal? | A supported option or an already formed contract raises a different issue |
| Expiration | Has the stated acceptance period ended under its actual rule? | A later response does not accept a lapsed proposal without a new basis |
| Multiple offers | Which separate proposals can this seller lawfully consider? | Independent negotiations are not automatically an auction |
| Backup agreement | What binds now, and what future duty depends on the primary transaction? | Conditional performance does not necessarily postpone all contract formation |
The distinctions that matter
| Distinction | How it works | What to notice |
|---|---|---|
| Conditional assent and a minor request | A substituted bargain can be a counteroffer even when its author describes the change as small. | Ask whether assent depends on the new term, rather than inventing a dollar threshold. |
| Inquiry and a demand | An optional question can leave the proposal open; a demand conditions agreement on a change. | A question mark or polite wording does not decide the issue alone. |
| Pending offer and existing contract | Accepting an unformed bargain differs from exercising review or modification rights under an existing agreement. | Read the actual attorney-review clause and communication instead of treating every suggested amendment as rejection. |
| Rejection, withdrawal and lapse | The offeree rejects, the offeror withdraws, and time can expire under the stated terms. | Track who acts and when the relevant rule makes the act effective. |
| Highest price and the complete proposal | Credits, financing, contingencies and timing can affect the seller's lawful comparison. | A price-minus-credit illustration is not a full closing statement or a ranking guarantee. |
| Multiple offers and contemporaneous clients | Several offers can come from different agents. Illinois's defined disclosure concerns clients of the same designated agent. | Check the same parcel or unit, knowledge or reason to know, simultaneous consideration and requested referral. |
| Existence, terms and confidential limits | The fact of competition, another party's offer terms and a client's protected negotiating ceiling are different information. | Disclosure of competition is not permission to reveal every confidence or invent terms. |
| Backup signature and activation | A backup agreement can create present binding commitments with later performance conditional on specified events. | Do not assume no contract exists or either party is always free to walk away before activation. |
Work through the facts
The exact offer is accepted
Assume all relevant formation and writing requirements are satisfied. A buyer's proposal calls for signed acceptance received by the stated authorized recipient by 5 p.m. The seller accepts without qualification and that acceptance is received at 4:40 p.m.
- The stipulated acceptance matches the open proposal.
- The specified form and receipt deadline are met.
Answer: The facts establish acceptance under this offer. The example does not set a universal receipt rule for every communication.
A separate counter changes closing
A buyer offers a June 15 closing. The seller returns a separately prepared, authorized counterproposal requiring June 30. No existing contract or special review procedure is supplied.
- The seller proposes a substituted bargain.
- The seller is now the counterofferor and the buyer is the new offeree.
Answer: This is a counteroffer, not acceptance of the June 15 proposal. Do not alter another person's signed document without the required authority.
A small credit is still a condition
The recipient says acceptance depends on a new $500 credit, then describes it as too small to count. The question expressly supplies a substituted bargain rather than an optional inquiry.
- The response makes assent conditional.
- A small amount does not convert the different bargain into acceptance.
Answer: Classify the actual response. Finnin supplies published strict-acceptance analysis in a stock-transaction context, not a universal rule for merchant goods or every existing contract review clause.
A genuine optional inquiry
The stipulated communication merely asks whether patio furniture could be discussed and makes no acceptance conditional on it or rejection of the pending proposal. The offer has not otherwise ended.
- The facts expressly identify an inquiry.
- An exploratory question is different from a substituted commitment.
Answer: The inquiry alone does not reject the proposal. A private ambiguous letter would need its words, context and applicable terms examined.
The original is not automatically revived
The buyer's $450,000 offer is expressly rejected by a seller counteroffer at $460,000. The buyer later says the original $450,000 is accepted. The seller has not renewed it and no other basis is supplied.
- After the stated rejection, the original offer is not still open merely because its former deadline remains.
- The buyer is responding to the wrong proposal.
Answer: The buyer cannot create acceptance of the lapsed original on those stipulated facts. A new proposal would need its own acceptance.
Sent in time, received too late under this clause
The hypothetical expressly requires receipt by the named recipient by 5 p.m. Acceptance is sent at 4:59 p.m. but first received at 5:01 p.m. No extension or different rule is supplied.
- The supplied rule concerns receipt.
- Sending is not the required event in this example.
Answer: The stipulated receipt deadline is missed. Do not generalize this into a rule that every acceptance is always effective only on receipt.
Price and a credit are two terms
Offer A states $482,000 with a $12,000 seller credit. Offer B states $477,000 with a $3,000 seller credit. Ignore every other cost for this arithmetic comparison and assume both credits are applicable as stated.
- A: $482,000 minus $12,000 equals $470,000.
- B: $477,000 minus $3,000 equals $474,000.
Answer: B is $4,000 higher on this simplified price-minus-credit measure despite its lower headline price. This does not establish full seller proceeds, approval of the credits or which offer must be chosen.
A capped increment does not always stay full size
For arithmetic only, the supplied accepted formula is the lesser of $510,000 and the greater of $495,000 or a qualifying competing price plus $1,500. The qualifying price is $509,000. All trigger and comparison requirements are expressly satisfied.
- The uncapped comparison is $510,500.
- The stated ceiling limits the result to $510,000.
Answer: The computed price is $510,000, only $1,000 above the competitor. This does not guarantee acceptance, winning, appraisal or a legally effective private escalation clause.
Two clients of the same designated agent
One designated agent helps two clients prepare offers for the same condominium unit and has reason to know the owner's representative will consider them that evening. One client requests referral.
- The same agent, clients, unit and simultaneous consideration facts fit the rule.
- The statute includes preparing offers; a signed submission is not the only relevant stage.
Answer: Provide the required written disclosure to the affected clients and honor the requested referral to another designated agent. Disclosure does not authorize sharing their confidential limits.
A signed backup has present terms
The stipulated compliant backup agreement is binding now and imposes an immediate deposit obligation, while the later purchase performance depends on the stated primary-contract event.
- The agreement expressly has a present commitment.
- Its future performance condition is a separate feature.
Answer: Do not assume no contract exists or no deadline can run before activation. Apply each stated term and any actual withdrawal rights separately.
Mistakes to avoid
- A response is acceptance whenever the changed amount is small. A condition proposing a different bargain is not cured by the word minor.
- A question mark always means inquiry. Find whether the person conditions assent or merely asks about a possibility.
- Every attorney-review suggestion rejects the deal. An existing review clause requires its own analysis; formation and later review are different.
- The buyer can always return to the first rejected price. Check renewal or a new offer; the original does not automatically revive.
- Sending a signed page always meets the deadline. Apply the stated communication event, recipient, method and time.
- The seller must choose the highest number. Compare lawful terms and existing obligations, including credits and risk.
- Every competing buyer is automatically entitled to another buyer's ceiling. Protect actual confidential information; existence, terms and client limits differ.
- Two agents in the same company automatically trigger the same-agent rule. Check the actual designated agent and every statutory and rule condition.
- A backup cannot bind anyone before activation. Separate present formation and duties from conditional future performance.
- An improved-offer invitation and a binding counteroffer are the same. The actual communication determines whether it asks for proposals or itself invites acceptance.
Check your understanding
These are original teaching questions, not recalled or predicted PSI questions. Answer first, then explain why the other choices fail.
1. The seller returns a separately authorized counterproposal at a different closing date. Who is now the offeror in that negotiation?
- The seller as counterofferor
- Neither party because counters cannot be offers
- Both parties automatically under one accepted agreement
- The buyer merely because the buyer acted first
Show answer and explanation
Answer: A. The seller as counterofferor
A counteroffer changes the proposed bargain and reverses the roles. The buyer becomes the new offeree for this proposal.
2. The recipient expressly conditions acceptance on a new $500 credit, calling the change minor. The question supplies no existing review contract or special rule. What controls?
- Any signed response necessarily accepts
- The amount is automatically a seller commission
- The conditional substituted bargain, rather than the author's description of size
- Only changes above $1,000 can matter
Show answer and explanation
Answer: C. The conditional substituted bargain, rather than the author's description of size
Calling a condition small does not turn a different bargain into unqualified assent. Keep the actual response distinct from an optional inquiry.
3. The facts stipulate a genuine optional question, no rejection or conditional assent, and an otherwise open offer. What does that inquiry alone do?
- Guarantees the offer can never be withdrawn
- Does not itself reject the pending offer
- Automatically replaces the offer
- Automatically forms a contract
Show answer and explanation
Answer: B. Does not itself reject the pending offer
The question supplies an inquiry rather than a demand. Other ending events or protection against withdrawal would require their own facts.
4. An existing agreement has a specific attorney-review clause. Counsel suggests possible changes. What is the appropriate first step?
- Assume a polite sentence preserves every agreement
- Ignore the existing review terms
- Read the clause and actual communication in the existing-contract context
- Treat every suggestion as rejection of an unaccepted offer
Show answer and explanation
Answer: C. Read the clause and actual communication in the existing-contract context
Patel addresses a particular existing review clause and proposed changes. It does not make every suggestion a counteroffer or every disclaimer decisive.
5. The original buyer offer was expressly rejected by a counteroffer. No renewal or other basis is supplied. Can the buyer later accept the rejected original solely because its first deadline has not passed?
- Yes; the buyer chooses which signed proposal was accepted
- Yes; the original deadline erases every rejection
- No; the original is not automatically still open
- Yes; both prices automatically become binding
Show answer and explanation
Answer: C. No; the original is not automatically still open
The stated rejection matters. Renewal or a new proposal needs its own facts; changing one's mind does not by itself restore a rejected offer.
6. The hypothetical requires receipt by the named recipient by 5 p.m. The response is sent at 4:59 and first received at 5:01, with no extension. What is established?
- All communications always use a universal dispatch rule
- A platform signature alone changes the deadline
- The stated receipt deadline is missed
- The offer must automatically renew for one day
Show answer and explanation
Answer: C. The stated receipt deadline is missed
The supplied contract rule controls this scenario. It does not establish that every form of acceptance is always effective on receipt.
7. A is $482,000 less a stated $12,000 seller credit. B is $477,000 less $3,000. Ignoring all other costs, which comparison is correct?
- A is $5,000 higher after credits
- B is $4,000 higher on the simplified measure
- Both equal $470,000
- B must legally be accepted
Show answer and explanation
Answer: B. B is $4,000 higher on the simplified measure
A is $470,000 and B is $474,000 on this one measure. This is not a complete closing statement, credit-approval decision or mandatory choice.
8. The stipulated formula is min($510,000, max($495,000, qualifying price + $1,500)). The qualifying price is $509,000. What is the computed amount?
- $510,000 under this stated formula
- $510,500 regardless of the cap
- $509,000 because a cap erases the increment
- $495,000 because every escalation ignores competition
Show answer and explanation
Answer: A. $510,000 under this stated formula
The uncapped result is $510,500; the ceiling limits it to $510,000. The remaining $1,000 advantage is not a guarantee of winning or private enforceability.
9. The same designated agent represents two clients preparing offers for the same unit, with reason to know they will be considered at the same time. What is required?
- Assume the whole firm is one designated agent
- Wait until both offers are signed before any duties can arise
- Automatically disclose each client's confidential maximum to the other
- Written disclosure to affected clients and referral to another designated agent upon request
Show answer and explanation
Answer: D. Written disclosure to affected clients and referral to another designated agent upon request
Section 15-15(b) includes preparing offers; Rule 1450.830 supplies the same-agent, same-unit and concurrent-consideration test, including reason to know and requested referral.
10. Two clients have different designated agents at one sponsoring brokerage. No facts place both clients with the same designated agent. Does the firm name alone establish Rule 1450.830's defined same-agent trigger?
- Yes; any two properties qualify
- Yes; company and designated agent always mean the same thing
- No; examine the actual designated-agent and other trigger facts
- No duty of any kind can ever apply
Show answer and explanation
Answer: C. No; examine the actual designated-agent and other trigger facts
The rule has a specific same-agent trigger. Its absence on these limited facts does not erase other agency, confidentiality or legal duties.
11. A compliant written backup is binding now and requires an immediate deposit, with closing conditional on a stated primary-contract event. What is the best conclusion?
- Present duties can exist alongside conditional future performance
- The primary contract is automatically cancelled
- No obligation can exist until activation
- The buyer is always free to withdraw without reading the terms
Show answer and explanation
Answer: A. Present duties can exist alongside conditional future performance
Formation, current duties and conditional performance are different questions. The supplied deposit term cannot be ignored merely because the contract is a backup.
12. A seller signs two separate, incompatible counteroffers, each capable of binding acceptance, and both buyers effectively accept while they remain open. What is the risk?
- Each buyer automatically receives half the title
- The seller may incur incompatible contractual obligations
- The offers automatically merge into one
- The second buyer is automatically bound by the first buyer's terms
Show answer and explanation
Answer: B. The seller may incur incompatible contractual obligations
Keep the negotiations separate. One counteroffer does not automatically cancel another. A proposal invitation or a carefully conditioned process differs; do not invent protective terms absent from these facts.
13. Under the stated exclusive brokerage agreement, the purchase agreement is signed but a financing contingency is still unresolved. Does signature alone satisfy Section 15-75's stated endpoint for the described offer-and-notice assistance?
- Yes; every related obligation ends on the first signature
- No; the provision also requires all contingencies to be satisfied or waived
- Yes; contingencies can never matter after formation
- No; the client must necessarily cancel the agreement
Show answer and explanation
Answer: B. No; the provision also requires all contingencies to be satisfied or waived
Section 15-75 uses both signature and satisfaction or waiver of all contingencies. That endpoint for the described assistance does not itself decide every other continuing duty or a private cancellation right.
Common questions
What is the difference between an offer and a counteroffer?
An offer proposes a bargain to an offeree. A counteroffer proposes a substituted bargain, so track the new terms and reverse the roles. Under the stated ordinary formation rules, it rejects the original rather than accepting it. Actual options, existing review clauses and special governing rules require separate analysis.
Does a change have to be material to prevent acceptance?
Do not use material as permission to accept a different bargain while calling a condition minor. Finnin applied strict acceptance in a stock-transaction dispute even though changes were described as minor. A genuine inquiry differs. This is not a rule for every merchant-goods transaction, existing option or attorney-review procedure.
Is every question a counteroffer?
No. Examine whether the person is merely exploring a possible change or making agreement conditional on it. Punctuation and polite language do not decide the issue alone. The examples deliberately state which facts are established; a private ambiguous message may require more context.
Can a rejected original offer still be accepted before its first deadline?
Not merely because that deadline has not passed. If the offer was effectively rejected, identify renewal, a new offer or another valid basis rather than assuming it remains open. A later preference for the first price does not by itself revive that rejected proposal.
Does a suggested change during attorney review end the contract?
Not automatically. First identify whether a contract already exists and read the actual review clause and communication. Patel distinguishes its specific proposed-change situation from rejecting a pending offer. It does not create one universal review period or make any carefully worded disclaimer preserve every private agreement.
Is signing the same as effective acceptance?
No. Check what the proposal and governing law require, including authority, writing, assent, method and timing. Electronic form can satisfy relevant requirements under the stated conditions, but it does not automatically prove attribution or assent. Sending and receiving are different events; neither is a universal shortcut for every transaction.
Who rejects, revokes or lets an offer expire?
The offeree rejects; the offeror withdraws by revocation; lapse follows the stated time or other applicable ending rule. Each depends on effectiveness under the actual facts. A supported option or an existing contract cannot be analyzed simply as an ordinary unaccepted offer freely withdrawn at will.
Must the seller accept the highest price?
No general rule here requires that. Compare the complete lawful proposal, including credits, financing, contingencies, closing and possession, and respect any existing obligations. Do not substitute an agent's commission preference for the client's decision or use prohibited discrimination as a supposed business reason.
Must an Illinois licensee present every offer?
Section 15-15 requires timely presentation to and from the client unless that duty is waived. Separately, Section 15-75 specifies minimum services in exclusive written brokerage agreements. Do not treat the general waiver wording as blanket permission to discard those exclusive-agreement minimums or to hide an inconvenient offer.
When do exclusive-agreement offer services end?
Section 15-75 includes assistance with offers, counteroffers and related notices until an agreement is signed and all contingencies are satisfied or waived, plus answering the client's related questions. Signature alone does not meet both parts of that stated endpoint. Other continuing duties require separate analysis.
Can a seller counter several buyers simultaneously?
Separate proposals capable of binding acceptance can create conflicting obligations if more than one is effectively accepted. The wording and actual process matter. An invitation for improved offers differs from a counteroffer that gives a buyer power to bind the seller; do not assume an invitation heading alone prevents a contract.
What is Illinois contemporaneous-offer disclosure?
Section 15-15(b) includes making or preparing contemporaneous offers or contracts for the same property. Rule 1450.830 addresses purchase or lease offers for two or more clients of the same designated agent, the same parcel or unit, and knowledge or reason to know of simultaneous consideration by the owner or representative. Provide the required written disclosure and requested referral. The trigger is not merely sharing a brokerage.
Does that disclosure allow the agent to share client price limits?
No. The disclosure does not itself waive confidential information. A client's protected ceiling, another buyer's submitted terms and the existence of competition are different matters. Apply the actual agency duties, law and relevant authorizations; do not claim either that every offer term is always secret or that all information becomes freely shareable.
Can a licensee invent another offer to encourage a higher price?
No. Do not misrepresent competition or terms. The seller's lawful instructions do not authorize deception, and actual confidential information must be safeguarded. NAR's multiple-offer guidance is trade-association guidance; it does not replace Illinois law or turn every licensee or seller into a member subject to every NAR rule.
Does highest and best mean an auction?
Not automatically. Read the actual invitation and any applicable process. A request for revised proposals does not itself promise acceptance, require a particular winner or necessarily make a binding counteroffer. Buyers can decide whether and how to revise, subject to their actual commitments.
Can a backup agreement bind before activation?
Yes. A valid backup can impose current duties while making specified future performance conditional. Read formation, deposit, notice, withdrawal, activation and deadline terms separately. Do not assume no agreement exists, no deadline runs or every buyer can leave at any moment until the primary contract ends.
Can a licensee quietly edit the signed buyer offer into a counteroffer?
Rule 1450.775 addresses alterations to signed physical and electronic documents, including the stated written all-signatory consent or direction and the required signatures or initials at the time of the changes. Use the authorized process rather than silently editing terms. The separate-counterproposal example avoids treating classification as permission for unauthorized document changes.
Are these official PSI questions or a readiness test?
No. They are original exercises. PSI places multiple offers at national V.C and related offer-and-acceptance concepts in V.A, within Contracts' 19 scored national questions. No percentage on this set validates readiness. Explain the active proposal, response and roles, then practice new mixed questions.
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Official sources and scope
The Illinois contract instructions and identified published opinions support the formation and review distinctions. Finnin concerns a stock transaction; Patel concerns an existing agreement's particular attorney-review clause. Neither supplies one rule for every communication, merchant-goods transaction or review provision. Illinois agency, written-document and contemporaneous-offer requirements apply within their stated scope. NAR guidance has its own membership and policy context and does not replace state law. The arithmetic examples stipulate their comparison rules.
- 225 ILCS 454/1-10: client, customer and confidential information
- 225 ILCS 454/15-15: client duties
- 68 Ill. Adm. Code 1450.800: confidentiality safeguards
- 775 ILCS 5/3-102: covered conduct, advertising and discriminatory effects
- 68 Ill. Adm. Code 1450.830: defined contemporaneous offers
- Illinois written-agreement rule
- Finnin v. Bob Lindsay: strict acceptance despite changes called minor
- Patel v. McGrath: tentative requests and an existing review clause
- 740 ILCS 80/2: land agreements and required signed evidence
- 815 ILCS 333/5, 7 and 9: electronic agreement, recognition and attribution
- 815 ILCS 333/15: electronic sending and receipt
- 225 ILCS 454/15-75: exclusive-agreement minimum services
- NAR 2026 multiple-offer guidance: client decisions and limits of disclosure assumptions
- Illinois Courts contract instructions: foundational contract concepts
- Whitelaw v. Brady, 3 Ill. 2d 583 (1954): option structure and writing
- PSI June 24, 2026: national offer-and-acceptance concepts and multiple offers
This is exam preparation, not advice for a specific transaction. State law and the applicable facts control. Our editorial and corrections process explains how to report an issue.