- Official section
- National V.A.7: Bilateral and unilateral contracts
- Broker weight
- 19% of the national broker portion
- Expected scored items
- Contracts account for about 17 of 100 items
Illinois exam glossary
Unilateral contract
Think promise for performance. The offeror does not ask the offeree to promise that the act will be done. The offeror asks for the act itself. On real estate questions, this structure appears most often in rewards, some brokerage examples, and the underlying offer held open by an option.
Last updated: August 1, 2026
What does this exam area cover?
Short answer: A unilateral contract uses an offer that seeks acceptance by specified performance rather than a return promise. The offeree must know of the offer and perform according to its terms. A reward illustrates the structure. A real estate option has a supported promise to keep an underlying offer open and gives the optionee the sole choice whether to exercise. Illinois treats option exercise strictly: it must be timely, specific, certain, unconditional, and delivered in the required manner. Paying for the option period is not the same as exercising the purchase right.
This guide follows the PSI Illinois Candidate Information Booklet effective June 24, 2026, current Illinois decisions on acceptance by performance, option structure, strict option exercise, and real estate auctions, Illinois Pattern Civil Jury Instructions revised November 2025, 740 ILCS 80/2, and 5 ILCS 175/5-120, all checked through August 1, 2026. Rewards, beginning performance, substantial performance, promissory estoppel, open listings, procuring cause, option leases, renewal options, and statutory offers can require distinct analysis.
What is on the official outline?
- Topic
- Read what the offer requests
- What to know
- return promise, completed act, performance, notice, payment, delivery, result, condition, deadline, and method
- Best exam move
- The offer's requested mode of acceptance determines whether the structure is bilateral or unilateral.
- Topic
- Identify the offeror
- What to know
- reward promisor, property owner, optionor, employer, principal, listing owner, authority, and objective promise
- Best exam move
- The offeror promises payment, sale, renewal, or another benefit upon specified performance.
- Topic
- Identify the offeree
- What to know
- person performing, optionee, broker, finder, employee, intended class, knowledge, and capacity
- Best exam move
- The offeree must be within the intended group and act with knowledge of the offer.
- Topic
- Require a definite offer
- What to know
- specific promise, requested result, compensation, subject property, objective condition, time, notice, certainty, and communication
- Best exam move
- A vague statement of hope or possible generosity is not a reliable unilateral offer.
- Topic
- Require knowledge
- What to know
- awareness, communication, public notice, reward, performance before knowledge, inducement, motive, and later discovery
- Best exam move
- A person cannot accept an offer through an act done without knowing the offer existed.
- Topic
- Match the performance
- What to know
- exact act, condition, completed result, conformity, partial act, substitute act, deviation, and acceptance
- Best exam move
- Performance must satisfy what the offer objectively requested.
- Topic
- Distinguish beginning and completion
- What to know
- preparation, beginning performance, substantial performance, completed performance, tender, result, revocability, and payment
- Best exam move
- Beginning an act can affect legal protection but does not automatically earn a reward conditioned on completion.
- Topic
- Separate preparation
- What to know
- buy supplies, travel, investigate, apply, arrange financing, preliminary work, reliance, and performance invited
- Best exam move
- Preparation to perform is not necessarily the performance the offer invited.
- Topic
- Apply revocation
- What to know
- ordinary offer, withdrawal, communication, before acceptance, beginning performance, option-like protection, reliance, and legal timing
- Best exam move
- Do not apply a simple revocable-until-completion rule without checking the stage and governing doctrine.
- Topic
- Use reward examples
- What to know
- lost item, information, finder, knowledge, return, required proof, first performer, compensation, deadline, and public offer
- Best exam move
- The reward becomes due to a qualifying performer who knew of and satisfied the stated offer.
- Topic
- Analyze option consideration
- What to know
- option fee, legal value, keep offer open, specified period, irrevocable, separate promise, refund, and credit
- Best exam move
- The fee supports the promise not to revoke; it does not itself exercise the underlying offer.
- Topic
- Analyze the underlying offer
- What to know
- property, option price, purchase terms, lease renewal, length, rent, exercise, offer held open, and certainty
- Best exam move
- The option must state or incorporate sufficiently definite terms for exercise to create enforceable duties.
- Topic
- Exercise exactly
- What to know
- specific, certain, unconditional, written notice, address, deadline, receipt, tender, signature, and no new terms
- Best exam move
- A conditional response or materially altered purchase contract can fail strict option exercise.
- Topic
- Separate option and sale
- What to know
- right to choose, no present purchase duty, exercise, purchase contract, conveyance, price, closing, and deed
- Best exam move
- Before exercise, the optionee owns a contractual choice, not automatically title or a duty to buy.
- Topic
- Separate option and right of first refusal
- What to know
- fixed right, owner decision to sell, third-party offer, matching terms, trigger, notice, election, and deadline
- Best exam move
- An option can be exercised during its term; a right of first refusal usually waits for a triggering sale decision or offer.
- Topic
- Treat open listings carefully
- What to know
- nonexclusive, multiple brokers, owner sale, compensation, procuring cause, ready willing able, written agreement, and Illinois rules
- Best exam move
- Use unilateral as an exam classification while applying the actual written brokerage agreement and current law.
- Topic
- Separate auction bids
- What to know
- bid as offer, hammer as acceptance, absolute auction, reserve, announced terms, withdrawal, and contract formation
- Best exam move
- An auction bid is ordinarily an offer, not performance accepting a seller's unilateral purchase promise.
- Topic
- Apply land writing requirements
- What to know
- Frauds Act, option, land interest, memorandum, party charged, property, price, signature, and authorized agent
- Best exam move
- Unilateral structure does not eliminate the Illinois writing requirement for land-related enforcement.
- Topic
- Preserve proof
- What to know
- offer text, public notice, knowledge, timestamp, electronic record, performance evidence, notice receipt, tender, and witness
- Best exam move
- A unilateral claim turns on what was offered, what the performer knew, and what was actually done.
- Topic
- Protect brokerage scope
- What to know
- written agreement, approved form, option deadline, no legal opinion, no invented clause, supervising broker, attorney, and referral
- Best exam move
- A broker tracks performance and notice but does not rule on option exercise, procuring cause, revocation, or payment rights.
Which distinctions produce the most mistakes?
- Terms
- Unilateral vs. bilateral contract
- Difference
- A unilateral offer seeks performance. A bilateral offer seeks a return promise.
- Question cue
- Promise for act versus promise for promise.
- Terms
- Promise vs. performance
- Difference
- A promise commits to act later. Performance is the requested act or result itself.
- Question cue
- Commitment versus completion.
- Terms
- Preparation vs. beginning performance
- Difference
- Preparation gets ready to act. Beginning performance starts the conduct the offer actually invited.
- Question cue
- Ready work versus requested work.
- Terms
- Beginning performance vs. completed performance
- Difference
- Beginning can affect revocability and reliance. Completion satisfies an offer expressly conditioned on the finished result.
- Question cue
- Protection issue versus payment condition.
- Terms
- Reward vs. gift promise
- Difference
- A reward seeks a requested act in exchange. A gift promise is motivated by generosity without bargained performance.
- Question cue
- Bargain versus gratuity.
- Terms
- Option fee vs. purchase price
- Difference
- The option fee buys the decision period. Purchase price buys the property after valid exercise and performance.
- Question cue
- Choice right versus real estate.
- Terms
- Option purchase vs. option exercise
- Difference
- The option is the supported right to choose. Exercise is the act accepting the underlying offer according to its terms.
- Question cue
- Right held versus right invoked.
- Terms
- Option vs. right of first refusal
- Difference
- An option is exercisable as stated during its term. A right of first refusal generally becomes actionable only after a sale trigger.
- Question cue
- Present choice versus triggered priority.
- Terms
- Option vs. purchase contract
- Difference
- The optionee can ordinarily choose not to buy. In a bilateral purchase contract, buyer and seller already promise performance subject to terms.
- Question cue
- Choice versus reciprocal duty.
- Terms
- Open listing vs. exclusive right to sell
- Difference
- An open listing is nonexclusive and compensation depends on the agreed procuring result. An exclusive right to sell gives the named broker broader contractual protection.
- Question cue
- Multiple possible brokers versus exclusive compensation right.
- Terms
- Option exercise vs. counteroffer
- Difference
- Exact option exercise accepts the existing offer. A response conditioned on new material terms is a counteroffer and may fail exercise.
- Question cue
- Unconditional yes versus changed bargain.
- Terms
- Unilateral offer vs. auction bid
- Difference
- A unilateral offer seeks performance. At auction, the bidder's bid is ordinarily the offer accepted under announced sale terms.
- Question cue
- Act accepts versus bid proposes.
The P-E-R-F-O-R-M check
- Promise offered: identify the exact payment, sale, renewal, reward, commission, or other benefit the offeror promises.
- Eligible performer: confirm the offeree or intended class, knowledge of the offer, capacity, authority, and timing.
- Requested act: separate preparation, return promise, beginning performance, substantial performance, tender, and completed result.
- Follow every condition: match method, quality, notice, address, deadline, proof, tender, and any specific or unconditional exercise requirement.
- Offer protection: test revocation, reliance, beginning performance, supported option consideration, expiry, and destruction of subject matter.
- Result and remedy: determine whether acceptance occurred, payment became due, purchase duties arose, or only partial-performance issues remain.
- Maintain the record: preserve the offer, knowledge, performance, timestamps, delivery, receipts, and attorney referral for disputed legal effect.
- Event
- Offer communicated
- What it means
- Power to accept by act
- What it does not mean
- Contract already complete
- Event
- Preparation
- What it means
- Getting ready
- What it does not mean
- Requested performance necessarily began
- Event
- Beginning performance
- What it means
- Requested act starts
- What it does not mean
- Reward automatically earned
- Event
- Completed performance
- What it means
- Stated condition satisfied
- What it does not mean
- Every separate formality disappears
- Event
- Option fee paid
- What it means
- Offer kept open
- What it does not mean
- Purchase option exercised
- Event
- Option exercised exactly
- What it means
- Underlying offer accepted
- What it does not mean
- Deed already delivered
How do the rules work in scenarios?
Known reward completed
Scenario: An owner offers $2,000 to anyone who finds and returns a missing signed abstract. A searcher reads the offer, finds the document, and returns it as required.
- The owner promised payment for a specified result.
- The searcher knew of the offer before acting.
- The requested performance was completed.
Answer: The facts fit acceptance of a unilateral reward offer.
No knowledge of reward
Scenario: A neighbor returns a lost survey, then learns the next day that the owner had posted a reward.
- The neighbor did not know of the offer while performing.
- The return was not undertaken as acceptance of that offer.
- A later discovery cannot retroactively create bargained acceptance.
Answer: The classic reward contract did not form through the earlier unknowing act.
Search begins but result not delivered
Scenario: A reward promises payment for locating and delivering a lost key. A person searches for two hours but never finds or delivers it.
- Searching may begin the requested effort.
- The stated payment condition is locating and delivering the key.
- The completed result did not occur.
Answer: The searcher has not earned the stated reward on these facts.
Option fee is not exercise
Scenario: A buyer pays $5,000 for a 45-day option but sends no exercise notice during the term.
- The fee supports the owner's promise to keep the offer open.
- The buyer still must exercise by the contract's stated method.
- Payment at creation does not substitute for later election.
Answer: The option was supported but not exercised on the stated facts.
Conditional option response
Scenario: An optionee writes, I exercise if the seller reduces the price by $20,000, before the option deadline.
- The response changes the option price.
- Option acceptance must be unconditional and match the held-open offer.
- Timeliness alone does not cure the material condition.
Answer: The response is a counteroffer, not effective option exercise.
Wrong exercise method
Scenario: A lease option requires written notice delivered to the landlord's stated office by June 30. The tenant casually tells a maintenance worker on June 29.
- The option specifies written notice, recipient, place, and deadline.
- A maintenance worker is not shown as the authorized recipient.
- Illinois option law emphasizes strict compliance absent a legally sufficient waiver or other exception.
Answer: The oral statement does not satisfy the stated exercise method.
Ordinary purchase agreement
Scenario: A buyer promises to pay $425,000, and the seller promises to convey the property at closing.
- The buyer gives a return promise rather than accepting only through completed payment.
- The seller gives a reciprocal conveyance promise.
- Both remain obligated subject to the agreement's conditions.
Answer: This is a bilateral purchase contract, not a unilateral reward structure.
What are the common exam traps?
- Trap
- Defining unilateral as one signature
- Correction
- Unilateral refers to acceptance by performance, not the number of signers.
- Trap
- Calling every one-sided promise enforceable
- Correction
- The offer still needs definiteness, lawful purpose, and consideration or requested performance.
- Trap
- Accepting a reward without knowledge
- Correction
- The performer must know of the offer to act in response to it.
- Trap
- Using a return promise when performance is required
- Correction
- A promise to act later does not accept an offer expressly seeking the completed act.
- Trap
- Treating preparation as completion
- Correction
- Buying supplies or traveling may not begin the performance invited.
- Trap
- Paying for any partial act
- Correction
- The offer determines whether payment requires completion or allows partial compensation.
- Trap
- Revoking freely after performance begins
- Correction
- Beginning or substantial performance can create legal protection; analyze the exact stage and doctrine.
- Trap
- Calling option fee purchase price
- Correction
- The fee buys the decision period unless the agreement also credits it toward price.
- Trap
- Calling payment of the option fee exercise
- Correction
- Exercise is a later, separate act following the option's stated method.
- Trap
- Exercising with changed terms
- Correction
- A conditional or materially altered response can be a counteroffer rather than exercise.
- Trap
- Ignoring the option deadline
- Correction
- Strict timely exercise is central unless a legally sufficient exception applies.
- Trap
- Ignoring the notice recipient
- Correction
- Deliver to the person and place the option specifies.
- Trap
- Calling every listing unilateral
- Correction
- The classification depends on the actual brokerage agreement and invited obligations.
- Trap
- Calling an auction bid performance
- Correction
- The bid is ordinarily the offer accepted under the auction terms.
- Trap
- Letting the broker decide exercise validity
- Correction
- Track documents and deadlines, then refer contested option rights to counsel.
Can you answer these original practice questions?
These questions are original study items aligned to the published outline. They are not copied, recalled, or predicted PSI questions.
1. How is a unilateral contract accepted?
- By the performance the offer requests
- Only by a return promise
- Only by recording a deed
- By silence in every case
Show answer and explanation
Answer: By the performance the offer requests
The act must conform to the offer's stated conditions.
2. What is the classic unilateral-contract example?
- A reward
- A bilateral purchase agreement
- A deed tax
- A mortgage lien
Show answer and explanation
Answer: A reward
The offeror promises payment for a completed requested result.
3. Can a person accept a reward offer without knowing it exists?
- No
- Yes
- Only for land
- Only after recording
Show answer and explanation
Answer: No
The act must be performed with knowledge of the offer.
4. Does beginning a search always earn a completion reward?
- No
- Yes
- Only if expensive
- Only if a broker searches
Show answer and explanation
Answer: No
Payment depends on what result or performance the offer requires.
5. What does option consideration buy?
- The right to choose while the offer remains open
- Immediate title
- Automatic exercise
- A property-tax exemption
Show answer and explanation
Answer: The right to choose while the offer remains open
The optionee generally has no duty to purchase before exercise.
6. How must an option be exercised?
- Specifically, certainly, unconditionally, timely, and by the required method
- By any casual statement
- Only after expiration
- By changing the price
Show answer and explanation
Answer: Specifically, certainly, unconditionally, timely, and by the required method
Strict compliance is the central Illinois option rule.
7. Is paying an option fee the same as exercise?
- No
- Yes
- Only in leases
- Only if cash
Show answer and explanation
Answer: No
The fee supports the option; exercise invokes the underlying offer later.
8. An optionee demands a lower price while claiming exercise. What is the response?
- A counteroffer
- Unconditional exercise
- A deed
- A lease renewal automatically
Show answer and explanation
Answer: A counteroffer
The material condition does not match the option offer.
9. What is a typical signed purchase agreement?
- A bilateral contract
- A unilateral reward
- An appraisal
- A tax sale
Show answer and explanation
Answer: A bilateral contract
Buyer and seller exchange promises rather than waiting for one completed act to accept.
10. Who should decide whether a disputed option was exercised?
- Qualified counsel and ultimately a court
- A broker acting alone
- The photographer
- The appraiser
Show answer and explanation
Answer: Qualified counsel and ultimately a court
The broker should preserve proof and deadlines without giving a legal ruling.
How should you study this area?
- Session
- Session 1
- Focus
- Classify acceptance mode
- Proof you are ready
- Sort 35 promise-for-promise, promise-for-act, reward, purchase, lease, listing, option, bid, and gift scenarios.
- Session
- Session 2
- Focus
- Track performance
- Proof you are ready
- Classify 30 knowledge, preparation, beginning, substantial performance, completion, tender, deviation, and proof facts.
- Session
- Session 3
- Focus
- Handle revocation
- Proof you are ready
- Solve 25 ordinary-offer, communication, reliance, beginning-performance, option, expiration, and subject-matter problems.
- Session
- Session 4
- Focus
- Master options
- Proof you are ready
- Audit 30 consideration, option period, underlying terms, written notice, recipient, method, deadline, tender, conditional response, and waiver facts.
- Session
- Session 5
- Focus
- Separate real estate structures
- Proof you are ready
- Compare bilateral purchase agreements, open listings, exclusive listings, options, rights of first refusal, renewals, auctions, and deeds.
- Session
- Session 6
- Focus
- Run P-E-R-F-O-R-M
- Proof you are ready
- Audit two Illinois option files, score at least 90 percent, and identify the exact act required for acceptance in every question.
Do not count recognition as mastery. Close the notes and explain the rule, apply it to a new fact pattern, and identify why each distractor fails.
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Questions students ask about Unilateral Contract: Illinois Real Estate Exam Guide
What is a unilateral contract?
A unilateral contract results when an offer seeks acceptance through specified performance rather than a return promise. The offeror promises something if the offeree completes the requested act. A reward is the familiar example: the person offering the reward promises payment to the person who performs the stated task while knowing of the offer.
What is the difference between bilateral and unilateral contracts?
A bilateral contract is promise for promise. A unilateral contract is promise for performance. A typical signed purchase agreement is bilateral because buyer and seller exchange commitments. A reward or an option's underlying offer can use unilateral logic because the promisor seeks completion of a specified act or exact exercise rather than a promise to consider acting.
How is a unilateral offer accepted?
The offeree accepts by completing the performance the offer invites, or by performing to the degree the offer and governing law treat as acceptance. The act must conform to the stated conditions. A promise to perform later is not enough when the offer expressly requires completed performance, and a materially different act is not acceptance.
Must the offeree know about a reward offer?
Yes for the classic contract analysis. A person cannot perform in exchange for an offer the person did not know existed. If someone returns lost property before learning that a reward was offered, the earlier act was not induced as acceptance of that offer. Statutes or independent promises can create other rights, but they are separate.
Can the offeror revoke a unilateral offer?
An ordinary offer can generally be revoked before acceptance, but commencement or substantial performance can create legal protection against revocation under applicable doctrine. The exact offer, performance stage, communication, reliance, and jurisdictional rule matter. A supported option is different because consideration binds the promise to keep the underlying offer open for the option term.
Is a real estate option a unilateral contract?
An option has two parts. First, consideration supports the optionor's promise to keep an underlying offer open for a specified period. Second, the optionee alone decides whether to exercise that offer. Illinois decisions describe options using unilateral principles and require strict attention to the exercise terms. The optionee is not ordinarily required to buy before exercise.
How must an Illinois real estate option be exercised?
Acceptance of an option offer must be specific, certain, unconditional, timely, and made through the method the option prescribes. If the document requires written notice at a stated address by a stated date, a vague email proposing later discussion may not exercise it. Exact compliance is an exam priority.
Is paying an option fee the same as exercising the option?
No. The option fee or other consideration buys the binding decision period. Exercise accepts the underlying offer according to the option's stated method. The option agreement may credit its fee toward the purchase price, make it nonrefundable, or use another treatment, but payment of the fee alone ordinarily does not communicate the later election to purchase.
Is an open listing a unilateral contract?
Real estate exam texts often describe an open listing as unilateral because the owner promises compensation to the broker who becomes the procuring cause of a completed transaction under the listing terms, while no single broker promises exclusive performance. Actual Illinois brokerage agreements must comply with current written-agreement and licensing rules, so read the document rather than relying only on the label.
Does beginning work always earn the promised payment?
No. Beginning can affect revocability or create other rights, but payment ordinarily depends on the performance specified by the offer. If a reward requires finding and returning a lost item, searching alone does not complete the condition. If the offer permits partial performance or promises proportional payment, its exact terms can produce a different result.
Are these official PSI questions or legal advice?
No. The questions are original. Illinois decisions, statutes, and court materials were checked through August 1, 2026. This is exam education, not legal advice. A live matter requires the complete offer, option, listing, notice, performance record, authority, timing, and analysis by qualified Illinois counsel.
Primary sources
- PSI Illinois Candidate Information Booklet effective June 24, 2026
- Illinois Courts, official decision discussing objective acceptance by performance
- Illinois Courts, official real estate decision explaining option structure and consideration
- Illinois Courts, official decision requiring specific, certain, unconditional option exercise
- Illinois Courts, official real estate auction decision distinguishing bid and acceptance
- Illinois Courts, Pattern Civil Jury Instructions contract chapter revised November 2025
- Illinois General Assembly, 740 ILCS 80/2 land-contract writing requirement
- Illinois General Assembly, 5 ILCS 175/5-120 electronic signatures
The current official outline controls the tested scope. Statutes, regulations, and official agency materials control when a general study rule and a jurisdiction-specific rule differ.
Editorial status
Checked against primary sources
The Pass Illinois editorial team last checked this guide on August 1, 2026. Every practice question is an original study item, and the source links above let you verify the rules that support the lesson.