Illinois exam glossary
Consideration
A missing earnest-money check does not, by itself, tell you whether a sales contract has consideration. Start with the promises the buyer and seller actually exchanged. Then read the deposit clause to see whether it sets a performance duty or a condition of formation.
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The short answer
Consideration is a bargained-for exchange supporting a contractual promise. It can be a promise, an act or forbearance, rather than cash alone. The buyer's promise to pay and the seller's promise to convey ordinarily support a bilateral purchase contract. Earnest money has its separate contractual role. A past independent act, an entirely optional promise or doing only an existing duty may fail to supply the required exchange. Legal sufficiency does not ordinarily require equal market value.
The PSI outline effective June 24, 2026 covers valid-contract elements at national V.A.2. The whole Contracts domain receives 19% of the 100 scored national broker questions, or 19 questions; consideration has no separate published quota. This glossary uses Illinois statutes, the identified contract instructions and published decisions. These are original exercises, not PSI questions or a validated readiness score.
Identify the exchange before deciding what it proves
- Identify the promise and what was sought in return. A party's private motive or a polite thank-you is not necessarily a bargained exchange.
- Classify the return item: a promise, an act, forbearance or a change in a legal relationship. Cash is one possibility, and a legal detriment need not be an economic loss.
- Check whether the supposed return is real. Was it already owed, completed independently before the bargain, or left entirely optional?
- Read the agreement as a whole. If other valid consideration supports it, every clause need not impose identical reciprocal promises.
- Separate the deposit, option commitment and modification. Their conditions, credit, refund, timing and remedies come from the actual terms and law.
- Keep proof and performance distinct. A signed writing, a consideration recital, a paid deposit and completed performance answer different questions. Refer a disputed enforceability issue for qualified legal review.
| Facts | Consideration question | Keep separate |
|---|---|---|
| Buyer promises payment; seller promises conveyance | Are the real promises exchanged for each other? | Deposit timing and other contract requirements |
| A party performs a requested act | Was the act sought in return for the promise? | An independent favor completed before the bargain |
| A party refrains from exercising a valid right | Was the lawful restraint bargained for? | A duty the party already had |
| A party repeats exactly the same existing duty | What new legal value supports the new promise? | A new signature without a new exchange |
| An option holder pays for a decision period | What supports the keep-open commitment? | Whether the holder later elects to purchase |
| A later appraisal differs from the agreed price | Is this an ordinary unequal bargain or an exceptional legal issue? | No automatic percentage safe harbor or invalidity rule |
The distinctions that matter
| Distinction | How it works | What to notice |
|---|---|---|
| Consideration and earnest money | Consideration is the bargained exchange supporting the promise. Earnest money is a deposit governed by the agreement. Reciprocal purchase and conveyance promises can supply consideration without a deposit paid at signing. | Read whether deposit language creates a performance obligation or an actual formation condition. |
| A legal detriment and an economic loss | Undertaking a legal obligation, performing a requested act or giving up a valid right can supply legal value. The party need not prove that the bargain made them financially poorer. | Benefit or detriment describes legal value, not a requirement that both sides lose money. |
| Legal sufficiency and equal value | Sufficiency asks whether the required legal exchange exists. Adequacy compares economic value. Illinois generally does not reprice a freely made bargain merely because values differ. Exceptional shocking inadequacy is a separate issue. | There is no universal percentage-of-appraisal test for consideration. |
| An ordinary unequal bargain and Dohrmann | Dohrmann v. Swaney involved extraordinary disparity and the particular promised name-change arrangement. The court treated the inadequacy as sufficient in itself and also found unfair circumstances. That is not a rule that every discount invalidates a sale or that separate unfairness is always an indispensable extra element. | Avoid both amount never matters and every unequal price fails. |
| A real promise and an illusory promise | A real promise creates a commitment. A wholly optional statement creates none. But another valid exchange can support an agreement even when one clause lacks a mirrored promise. | Consider the whole bargain before declaring the entire agreement unsupported. |
| A contingency and unlimited discretion | A defined financing or inspection condition need not make a promise illusory. The actual terms may impose good faith, reasonable efforts, an objective event or a stated satisfaction standard. | Do not treat every condition as unlimited freedom or assume every contingency has identical duties. |
| A past independent act and requested performance | An act completed independently before the later promise ordinarily was not exchanged for that promise. Performance following an earlier bargain is different, even if it happened before a later document was signed. | The date of the written record alone does not tell you when the bargain was made. |
| A new modification and the same existing duty | Doing only what is already legally owed ordinarily supplies no new detriment for a new promise. A new obligation, reciprocal concession or other recognized legal basis requires its own analysis. | A signature or a new label alone does not establish a fresh exchange. |
| No consideration and later nonperformance | No consideration concerns the absence of the necessary exchange at formation. Failure of a promised exchange or breach concerns performance afterward. The particular failure and legal requirements affect remedies. | Later nonperformance does not automatically prove no contract ever formed. |
| Option consideration and the purchase price | The option exchange supports keeping the offer open for the agreed period. The holder need not promise to buy merely to have a supported choice. Exercise, price payment and any fee credit or refund depend on the actual terms. | Do not treat every option fee as automatically refundable, forfeited or credited. |
| A small exchange and a printed recital | A small bargained exchange is not automatically insufficient. A printed one-dollar or other-value recital also does not resolve every factual or legal dispute. Identify what was actually exchanged and the applicable rules. | Neither the small amount nor the printed acknowledgment alone decides every case. |
| Consideration and the signed land-sale writing | Section 3 of the Frauds Act permits consideration to be proved or disproved by parol or other legal evidence without expressing it in the writing. The actual exchange and applicable land-writing, signature and other requirements remain. | Permission to prove consideration is not permission to disregard every writing requirement. |
| A gift promise and a completed conveyance | An unsupported future gift promise ordinarily lacks the exchange needed for a bargain contract. A deed or completed transfer raises different requirements and should not be declared invalid solely from this contract definition. | Separate an executory promise from the validity of an actual conveyance. |
| Mutual assent and consideration | Mutual assent concerns objective agreement to the terms. Consideration concerns the bargained exchange. Neither a signature alone nor a payment alone proves every requirement of a valid and enforceable contract. | Identify each element rather than using one fact as a shortcut for all of them. |
Work through the facts
Reciprocal sale promises
The buyer promises to pay $375,000 and close, while the seller promises to convey marketable title to the described property.
- The promises were exchanged for each other.
- Each party undertook a legal obligation.
- A separate earnest-money payment is not necessary to identify this exchange.
Answer: The reciprocal promises provide consideration.
Late earnest money
Assume a signed bilateral purchase contract already has consideration and makes the $5,000 deposit a performance obligation, not a condition of formation. Its stated trigger starts a two-business-day delivery period, but delivery occurs on the fourth business day after that trigger.
- The example expressly supplies reciprocal consideration and treats the deposit as a performance duty.
- The fourth business day is later than the stipulated two-business-day period.
- The clause, notice, cure, waiver and remedy requirements still control the consequences; lateness does not itself prove no exchange existed.
Answer: Analyze the deposit clause separately from the existence of consideration.
Past landscaping
After a neighbor landscaped an owner's yard without requesting payment, the owner promises to convey a vacant lot as thanks.
- The landscaping was completed before the promise.
- It was not requested as the price of the later conveyance promise.
- Gratitude or moral obligation does not turn the past act into a present bargain.
Answer: The old landscaping is past consideration and ordinarily does not support the new promise.
Illusory purchase promise
Assume the only alleged return for the seller's promise is a buyer statement that the buyer will purchase only if the buyer later feels like buying. There is no deadline, standard, good-faith limit, paid option or other bargained consideration.
- The buyer retains unrestricted choice whether to perform.
- No stated constraint or other exchange supports the seller's promise in this example.
- This differs from a supported paid option in which the holder has bought a choice.
Answer: The buyer's promise is illusory on the stated facts.
Option fee
An owner promises to keep a $600,000 offer open for 30 days in exchange for the buyer's nonrefundable $2,500 option fee.
- The owner undertakes not to revoke during the stated period.
- The buyer provides the $2,500 in exchange for that commitment.
- Exercise and purchase-price payment remain separate steps.
Answer: The $2,500 supports the option promise if the agreement's other requirements are met.
Preexisting repair duty
A signed contract already requires the seller to repair the roof. The buyer later promises an extra $4,000 solely for the seller to perform that same repair.
- The seller already owes the roof repair under the contract.
- Promising the identical performance adds no legal detriment.
- New consideration or another recognized modification basis would be needed.
Answer: The preexisting duty ordinarily does not support the buyer's new payment promise.
Unequal values
A knowledgeable owner voluntarily agrees to sell vacant land for $90,000, and a later appraisal estimates $110,000. No unfairness or consent defect is stated.
- The example supplies a voluntary exchange of real promises.
- The later $110,000 appraisal differs from the $90,000 agreed price but does not itself establish the exceptional shocking-inadequacy situation.
- There is no general percentage difference that automatically invalidates or guarantees enforcement of every bargain.
Answer: The value difference does not by itself make consideration legally insufficient.
Forbearance can supply legal value
Assume a party has a valid, presently enforceable right to demand payment and no existing duty to wait. In a new bargain it promises a 20-day delay in exchange for the other party's new, otherwise unowed service. Assume the restraint and service are lawful.
- The first party gives up immediate exercise of its valid right for the stated period.
- That forbearance was sought in exchange for the new service, rather than volunteered independently.
- This identifies legal value; authority, required writing and other enforceability questions remain separate.
Answer: The bargained forbearance and new service supply identified legal value without requiring a new cash payment.
A price credit must come from the actual terms
In a separate option example, the purchase price is $600,000. The agreement expressly credits an actually paid $2,500 option fee against that price if the holder exercises. Ignore other costs, credits, deposits and financing.
- The assumed contract expressly supplies the credit; the label option fee alone would not.
- $600,000 - $2,500 = $597,500 remains of the purchase price.
- This is not the full cash-to-close calculation or a rule about every option's refundability.
Answer: The stipulated purchase-price balance is $597,500, before the excluded items.
A supported choice is different from an empty promise
Assume the owner's 30-day keep-open commitment is supported by an actually paid bargained fee and the other option requirements are met. The holder remains free to decline the purchase.
- The paid exchange supports the keep-open commitment.
- The holder's lack of a present duty to purchase does not erase that other valid consideration.
- This differs from the earlier example whose only alleged return was an entirely optional buyer statement.
Answer: The supported option can provide a binding decision period without a present promise to buy.
Mistakes to avoid
- Looking only for a deposit check Identify the real reciprocal promises, then read what the deposit clause requires.
- Treating every old act as past consideration Distinguish an independent completed favor from performance of an earlier bargain.
- Requiring every clause to mirror the other side's duty Consider the whole agreement and other valid consideration.
- Calling every contingency illusory Identify its actual event, standard, good-faith or reasonable-efforts limits.
- Treating a signature as the whole exchange Assent, consideration, authority and writing requirements are separate questions.
- Saying amount never matters An ordinary unequal bargain differs from exceptional shocking inadequacy; do not invent an appraisal-percentage rule.
- Making every option fee automatically refundable or credited Read the fee, exercise, price and refund terms.
- Turning one formation issue into a guaranteed remedy No consideration, later breach and the requirements for relief must be analyzed separately.
Check your understanding
These are original teaching questions, not recalled or predicted PSI questions. Answer first, then explain why the other choices fail.
1. What is consideration?
- The appraised value
- Only cash
- A bargained-for exchange of promises, acts, or forbearance
- Only earnest money
Show answer and explanation
Answer: C. A bargained-for exchange of promises, acts, or forbearance
The exchange may create a benefit, detriment, or responsibility.
2. What ordinarily supplies consideration in a bilateral sale contract?
- Both parties must complete every promised act at signing before any consideration exists
- The later appraisal supplies the promised exchange even if neither party commits
- Only a paid deposit can supply legal value, regardless of the reciprocal promises
- The buyer's and seller's reciprocal promises
Show answer and explanation
Answer: D. The buyer's and seller's reciprocal promises
The buyer undertakes to purchase and pay while the seller undertakes to convey and perform.
3. Is earnest money always required for consideration?
- Yes, every unpaid deposit prevents formation regardless of the actual clause
- No
- Yes, it is the only possible legal value in a bilateral purchase contract
- Yes, the promise to convey has no possible value until the deed is delivered
Show answer and explanation
Answer: B. No
No universal deposit rule replaces the bargained exchange. Real reciprocal promises can supply consideration; an actual formation condition or deposit performance requirement must still be read.
4. What is an illusory promise?
- A promise constrained by an actual good-faith performance standard
- A statement leaving performance entirely optional
- A supported paid option that permits the holder to decline the purchase
- A promise with a defined financing condition
Show answer and explanation
Answer: B. A statement leaving performance entirely optional
The apparent promise creates no commitment. A defined good-faith condition and a supported paid option are different. Consider the whole agreement and other valid consideration before deciding that the entire bargain is unsupported.
5. What is past consideration?
- A newly bargained promise to refrain from exercising a valid right
- An act completed before and independently of the later promise
- An act performed in response to an earlier bargained promise
- Performance of a valid agreement made months before that performance
Show answer and explanation
Answer: B. An act completed before and independently of the later promise
The act was independent of the later promise. Performance of an earlier bargain is not automatically an independent past favor merely because it occurred before a later written record.
6. What does the preexisting-duty rule address?
- Changing the parties' obligations through a genuine reciprocal concession
- Giving a new, otherwise unowed service in return for a delay
- Undertaking a new repair beyond the existing contract obligations
- Doing only what one is already obligated to do
Show answer and explanation
Answer: D. Doing only what one is already obligated to do
Doing the identical existing duty ordinarily adds no new detriment. New, otherwise unowed performance or a genuine reciprocal change requires a different analysis; new cash is not the only possible consideration.
7. Must consideration equal fair market value?
- Only for leases
- Yes, exactly
- No, not ordinarily
- Yes, within one dollar
Show answer and explanation
Answer: C. No, not ordinarily
Ordinary consideration does not require matching market values. Exceptional shocking inadequacy can matter; Dohrmann treated the inadequacy as sufficient in itself and also found unfair circumstances. There is no universal appraisal-percentage test.
8. What does option consideration buy?
- Automatic ownership before the stated exercise and conveyance steps
- An automatic price credit even when the agreement provides otherwise
- A requirement that the holder buy even without exercising the option
- The binding right to decide within the option period
Show answer and explanation
Answer: D. The binding right to decide within the option period
The exchange supports the keep-open decision period, not automatic title or a compulsory purchase. Exercise, conveyance, any fee credit and refund depend on the actual terms and applicable requirements.
9. Under Illinois Frauds Act section 3, must consideration be recited in the writing?
- No, it may be proved or disproved by other legal evidence
- Yes, other legal evidence cannot be considered when the recital is omitted
- No, and therefore every land-sale writing requirement disappears
- No, and therefore an actual exchange is never required
Show answer and explanation
Answer: A. No, it may be proved or disproved by other legal evidence
Section 3 permits consideration to be proved or disproved by parol or other legal evidence without expressing it in the writing. It does not eliminate the actual exchange or every land-writing and signature requirement.
10. A promised exchange existed, but one party later did not perform. What issue arises?
- Automatic entitlement to every remedy without considering the particular failure
- Automatic extinguishment of every claim by both parties
- Failure of consideration or breach
- Automatic absence of formation
Show answer and explanation
Answer: C. Failure of consideration or breach
A promised exchange and later failure to perform are distinct from no exchange at formation. The specific failure, contract terms and legal requirements govern any remedy; there is no automatic right to every form of relief.
11. Work was performed in response to an earlier bargained promise, then recorded in a later writing. Is it necessarily an independent past favor?
- Yes, every performed act loses all legal value
- No, because a later writing removes every other legal requirement
- Yes, any act before a signature is past consideration
- No; identify when the actual bargain was made
Show answer and explanation
Answer: D. No; identify when the actual bargain was made
Performance following an earlier bargain differs from an act independently completed before any exchange. The date of a later written record alone does not settle the issue.
12. An amendment is signed. What still needs to be identified under the ordinary modification analysis?
- The actual new exchange or another recognized legal basis
- Only whether the new amount equals an appraisal
- Only whether the signatures use identical ink
- A mandatory additional cash fee in every modification
Show answer and explanation
Answer: A. The actual new exchange or another recognized legal basis
Offer and acceptance do not themselves establish fresh consideration. A new legal obligation or reciprocal concession may matter, and other doctrines or governing law require their own analysis.
13. Why can a paid option give the holder a choice without a present promise to buy?
- Every real-estate offer stays open without consideration
- The paid exchange supports the keep-open commitment
- The option fee always equals the whole purchase price
- An option automatically conveys title before exercise
Show answer and explanation
Answer: B. The paid exchange supports the keep-open commitment
An option separates the supported decision period from the later purchase election. Identical promises on every point are not required when other valid consideration supports the agreement.
14. Which stated fact can illustrate lawful bargained forbearance?
- Saying that performance will occur only if the promisor feels like it
- Delaying exercise of a valid right in exchange for a new otherwise unowed service
- Volunteering a favor before any promise is made
- Repeating a delay already legally required with no other exchange
Show answer and explanation
Answer: B. Delaying exercise of a valid right in exchange for a new otherwise unowed service
The valid right, lack of an existing waiting duty, lawful restraint and new exchange are supplied. This does not determine an actual claim's validity, required writing or remedies.
15. What does Frauds Act Section 3 permit in the stated context?
- Treating every unsupported promise as enforceable
- Proving or disproving consideration by other legal evidence without expressing it in the writing
- Ignoring every land-sale writing requirement
- Replacing actual consideration with any notarized recital
Show answer and explanation
Answer: B. Proving or disproving consideration by other legal evidence without expressing it in the writing
The statute concerns expression and proof of consideration. Other writing, signature, authority and substantive requirements remain separate.
16. Does the Dohrmann decision establish that separate unfairness is always required before shocking inadequacy can matter?
- No, because every unequal price automatically invalidates a contract
- No; it treated inadequacy as sufficient in itself and also found unfair circumstances
- Yes, every appraisal discrepancy needs a fraud judgment
- Yes, the court refused to examine inadequacy itself
Show answer and explanation
Answer: B. No; it treated inadequacy as sufficient in itself and also found unfair circumstances
Read the actual extraordinary facts and paragraph 37. The decision does not create an ordinary appraisal-gap rule or a universal requirement that every case prove the same additional facts.
17. Other valid consideration supports the agreement. Does every clause still require an identical reciprocal promise?
- Yes, any unequal wording automatically defeats the whole contract
- Yes, each clause needs a separate cash payment
- No; assess the actual supporting exchange rather than requiring mirrored promises everywhere
- Yes, a supported option holder must therefore promise to purchase
Show answer and explanation
Answer: C. No; assess the actual supporting exchange rather than requiring mirrored promises everywhere
Carter explains the distinction. Where other valid consideration exists, a lack of mirrored promises does not itself defeat the agreement; that does not remove the need for a real supporting exchange or other legal requirements.
18. A separate example expressly credits the paid $2,500 option fee against a $600,000 purchase price if exercised. What price balance remains before other costs, credits or financing?
- $600,000
- $597,500
- $602,500
- $575,000
Show answer and explanation
Answer: B. $597,500
Subtract the expressly credited $2,500 from $600,000. The result is a purchase-price balance in this stated example, not a verified cash-to-close or payoff. A fee is not automatically credited in every option.
19. In the stated deposit example, a $5,000 deposit is a performance duty due within two business days after its trigger, but arrives on the fourth business day. What should be assessed?
- The actual deposit clause and applicable notice, cure, waiver, breach and remedy conditions
- Automatic absence of all consideration despite the stated real reciprocal promises
- Automatic extension of the delivery period because the parties signed
- Automatic forfeiture to the broker in every transaction
Show answer and explanation
Answer: A. The actual deposit clause and applicable notice, cure, waiver, breach and remedy conditions
The example supplies consideration and makes the deposit a performance duty. Lateness does not automatically establish failed formation, a particular recipient of funds or entitlement to a specific remedy.
20. What does establishing valid consideration alone prove about an actual agreement?
- One required element is supported; assent, authority, capacity, lawful purpose, writing and other issues remain
- Every printed recital must be factually true
- Every other formation and enforcement requirement is automatically satisfied
- No later breach can ever occur
Show answer and explanation
Answer: A. One required element is supported; assent, authority, capacity, lawful purpose, writing and other issues remain
Do not use one element as a substitute for the full legal analysis. The cited instructions and statute address different requirements, and a live contract or remedy dispute needs its own review.
Common questions
What is consideration in a real estate contract?
It is the bargained exchange supporting a promise. In an ordinary bilateral purchase contract, the buyer promises to purchase and pay while the seller promises to convey and perform the agreed obligations. Those real reciprocal promises can supply consideration. The exchange may involve promises, acts, forbearance or a change in legal relations, rather than cash alone.
Is earnest money the only consideration?
No. Earnest money is a deposit, while the actual purchase and conveyance promises can supply the bargain. The contract may still require delivery of a deposit by a particular deadline. Read whether that clause sets a performance duty or makes a payment an actual condition of formation; do not replace the clause with a universal rule that a deposit is always essential or never matters.
Does a late deposit mean the contract never formed?
Not automatically. Where real reciprocal promises already supplied consideration and the deposit is a performance obligation, lateness raises the actual clause, notice, cure, waiver, breach and remedy questions. If the parties instead made a payment a formation condition, that language needs separate analysis. Keep the stated trigger, business-day definition, delivery requirements and receipt facts distinct.
Does consideration have to be money?
No. A binding promise, a requested act, lawful forbearance or a change in a legal relationship can have legal value. Undertaking an obligation need not cause an economic loss to count as a legal detriment. Identify what was bargained for rather than searching only for a new payment or assuming a party must suffer financially.
Must consideration equal the appraised value?
Ordinarily no. Illinois generally does not reprice a freely made bargain just because the values differ. That differs from exceptional shocking inadequacy, illusory exchange and other enforceability issues. Dohrmann v. Swaney treated the inadequacy on its extraordinary facts as sufficient in itself and also found unfair circumstances. Do not impose a universal additional-unfairness requirement or invent a safe percentage discount.
Is one dollar always enough consideration?
A small amount is not automatically insufficient, and a printed one-dollar recital is not a universal answer. Identify the actual bargain, what was promised or provided, and any applicable formal or special rules. A token acknowledgment does not resolve every dispute about whether an exchange existed or whether other enforceability problems are present. A deed or completed transfer is a separate question from this contract definition.
What is an illusory promise?
It appears to promise performance but leaves the supposed promisor uncommitted. If that statement is the only claimed consideration, the bargain may fail for lack of a real exchange. But consider the whole agreement: other valid consideration can support it without identical mirrored promises in every clause. A supported option and a genuinely constrained contingency are different from unlimited freedom with no return exchange.
What is past consideration?
An act completed independently before the later promise ordinarily was not bargained for as the return for that promise. A voluntary favor followed by gratitude is the usual teaching example. Performance under an earlier bargain is different, even when a written record is signed later. This classification alone does not decide every reliance, restitution or other possible theory of relief.
What is the preexisting-duty rule?
Doing only what one is already legally obligated to do ordinarily supplies no new detriment for an additional promise. A modification may involve a new obligation, reciprocal concession or another recognized basis that must be identified. Signing an amendment does not itself prove a fresh exchange, and consideration need not be new cash. The actual agreement and governing law still matter.
What consideration supports an option?
The option exchange supports the owner's commitment to keep an offer open for the stated period. It is separate from whether the holder later chooses to buy and how the purchase price is paid. The holder need not make a present purchase promise merely to receive a supported choice. Identify the actual consideration and terms rather than assuming every option requires the same separate cash fee, refund rule or price credit.
Must consideration be written in the Illinois land-sale memorandum?
Section 3 of the Frauds Act says consideration need not be set forth or expressed in the writing and may be proved or disproved by parol or other legal evidence. It concerns expression and proof, not elimination of consideration. Applicable land-writing, signature, authority, essential-term and other requirements remain; it does not authorize ignoring every writing requirement or relying on any oral side term.
Must each contract clause impose the same promise on both parties?
No. Carter explains that where other valid consideration supports the agreement, a lack of mirrored promises does not itself defeat it. In that case, other fee and location undertakings supported the resident's arbitration promise, so the court did not need to decide whether the other side's reciprocal arbitration promise was illusory. Use the consideration principle without treating that nursing-home decision as resolving every modern arbitration or real-estate clause.
Is no consideration the same as later failure to perform?
No. Absence of the required bargain at formation differs from failure to deliver a promised exchange afterward. Later nonperformance can raise breach or failure-of-consideration issues. Materiality, the actual conditions, defenses and requirements for relief still matter. Neither label automatically proves entitlement to rescission, all damages or any other particular remedy.
Are these official PSI questions or an actual enforceability decision?
These are original learning exercises, not PSI questions or a validated pass prediction. Explain what each promise sought in return, whether that return was real, and which writing or performance question remains. The examples do not decide an actual contract or remedy dispute. A live matter needs the complete agreement, facts, governing law and qualified review.
Does the option fee automatically reduce the purchase price?
No automatic credit or refund follows merely from calling a payment an option fee. Read the actual terms. If a separate example expressly credits a paid $2,500 fee against a $600,000 price upon exercise, the price balance is $597,500 before other costs, credits or financing. That conditional arithmetic is not a rule for every option or a verified closing figure.
Does every contract amendment require new cash?
No. Consideration can be a new or changed legal obligation, rather than money alone. But an amendment that merely promises extra payment for the identical duty already owed presents the preexisting-duty issue. Identify the actual new exchange, reciprocal concession or other recognized legal basis and any required form or authority. A new signature does not answer all those questions.
Can giving up a legal right count as consideration?
Lawful forbearance can supply legal value when it is bargained for. In the stated example, a party with a valid immediate right and no duty to wait promises a delay in return for a new, otherwise unowed service. That is different from a delay already required or an independent voluntary favor. An actual disputed claim, threat, settlement or release requires its own legal analysis; this example does not decide the claim's validity.
Does sufficient consideration make the whole contract enforceable?
It establishes one element, not every requirement or remedy. Assent, sufficiently definite terms, authority, capacity, lawful purpose, applicable writing and signature requirements, defenses and performance can raise separate issues. Neither a valid exchange nor a signature resolves all of them. Keep the exam question's stated facts separate from what would have to be proved in a live dispute.
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Official sources and scope
Reviewed October 28, 2026 against the identified official sources and explicit earlier primary readings. The contract-instruction collection includes November 2025 revisions; its introductory material has a stated damages-action scope. Published decisions are used for the identified principles and facts, with no complete current case-citator claim. This guide does not decide an actual deposit, option, amendment, deed, settlement, reliance or remedy dispute.
- PSI June 24, 2026: contract elements and option concepts
- Illinois Courts contract instructions: foundational contract concepts
- Carter v. SSC Odin Operating Co., 2012 IL 113204: consideration and mutuality
- Midwest Builder Distributing v. Lord and Essex (2007): conditions and interference
- Illinois General Assembly, 740 ILCS 80/3 proof of consideration
- 740 ILCS 80/2: land-contract writing and signature
- Whitelaw v. Brady, 3 Ill. 2d 583 (1954): option structure and writing
- The Terraces of Sunset Park v. Chamberlin (2010): paid purchase choice
- Ross v. May Company, No. 1-06-0239 (2007), pages 6-10: modification and consideration
- Marque Medicos Fullerton v. Zurich, 2017 IL App (1st) 160756: bargain and preexisting duty
- Dohrmann v. Swaney, 2014 IL App (1st) 131524: exceptional gross inadequacy
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.