Illinois broker exam practice
Real estate contracts practice
Read a contract question as a sequence of events. First identify the offer or existing agreement. Then locate the communication, condition or missed deadline that changes the analysis. A signature, an earnest-money payment and a remedy clause each do a different job. The questions below make you explain that difference.
Last reviewed:
The short answer
For a contract question, ask what existed, what happened next and which rule governs that event. Separate formation from enforceability, acceptance from performance, and a breach from the remedy that may be available. Use the stated contract terms, notice method and deadline. An assignment does not automatically release the original obligor, an electronic signature does not supply every missing contract element, and a remedy is not automatic because its name appears in a document.
The PSI booklet effective June 24, 2026 assigns 19% of the 100 scored national broker questions to Contracts as a whole. Its outline covers general contract law, purchase and lease contracts, and handling multiple offers and counteroffers. This page is an original mixed practice set, not official or recalled PSI material, a prediction of the questions you will receive or a validated readiness test.
Build the contract timeline
- Identify the starting point. Is there only an advertisement, an ordinary offer, a supported option or an already formed contract? An attorney-review request made under an existing agreement should not automatically be analyzed as if the parties had never contracted.
- Test the event against the correct rule. Offer acceptance must match the offer under the applicable strict rule; a changed acceptance can fail even when the change is called minor. A genuine inquiry is different from making agreement conditional on new terms. Put termination and effective acceptance in order rather than assuming a rejected offer revives.
- Check formation and enforceability separately. Look for sufficiently definite essential terms, assent, consideration, capacity, lawful purpose and authority. A signed page does not supply an essential bargain left for future agreement. An applicable statute of frauds can require signed written evidence without making every oral agreement automatically void.
- Follow the stated method and conditions. Read who must give notice, what must happen, when, to whom, and whether the relevant act is sending, receipt, signing or performance. Financing, inspection and attorney-review clauses can have different consequences. Do not supply one universal deadline, waiver or automatic cancellation rule.
- Track what remains. A signed purchase contract can still be executory because material performance is due. Assignment, delegation, novation, amendment and termination have different effects on rights, duties and continuing liability. An attachment’s label does not decide its substance.
- Separate the requested remedy from entitlement to it. A damages claim, liquidated-damages clause, rescission request and specific-performance claim require their own analysis. Enforceability, contractual limits, election, mitigation and equitable requirements matter. A broker holding an earnest-money dispute does not become the court deciding who wins.
- Apply the Illinois layer where the question calls for it. Current UETA provisions, signed-document duties and brokerage obligations add conditions. The repealed Electronic Commerce Security Act is not the current Illinois citation. Confidential information and nondiscrimination requirements still matter when several offers compete.
- Explain the strongest wrong answer. Name the fact it misses: an existing contract, a missing release, a receipt clause, an unsatisfied condition or an unproved remedy requirement. Review uncertain correct answers as well as mistakes; repeated exposure to the same set is not proof of exam readiness.
| Facts supplied | Likely issue | Do not assume |
|---|---|---|
| Changed acceptance, even called minor | Strict acceptance and counteroffer | Only price changes can matter |
| Genuine request without conditional agreement | Inquiry and context | Every question rejects an offer |
| Signed, but price or property left to future negotiation | Definite essential terms | Signatures fill every gap |
| Agreement formed; performance remains | Executory status | Signed always means fully performed |
| Rights transferred without an agreed release | Assignment and retained duties | The original obligor automatically disappears |
| Valid replacement agreed to extinguish the old obligation | Novation | A new payer alone proves release |
| Contract requires a written notice received by a deadline | Receipt, content and stated timing | Sending and receipt are always the same |
| Deposit dispute becomes known to the broker | Escrow duties and proper release authority | The broker may decide the winner |
| Owner grants a supported right to buy on stated terms | Option and exercise conditions | Title has already transferred |
| Contract names a money amount for breach | Liquidated damages or penalty analysis | The heading proves enforceability |
The distinctions that matter
| Distinction | How it works | What to notice |
|---|---|---|
| Formation and enforceability | Formation asks whether the parties reached the required agreement. Enforceability also involves applicable defenses and formal requirements. | A writing issue is not automatically proof that no assent ever occurred. |
| Void and voidable | Void means no legal effect in the stated analysis. A voidable agreement can be avoided by the protected party under the applicable rule and facts. | Do not treat every capacity, mistake or fraud situation as identical. |
| Bilateral and unilateral | A bilateral exchange uses promises; a unilateral offer calls for requested performance as acceptance. | Do not infer that every unilateral offer remains freely revocable until the final act. |
| Express and implied in fact | Words can express agreement; conduct can show an agreement implied in fact. A restitution claim is a separate concept. | Silence by itself does not create a universal duty to contract. |
| Counteroffer and inquiry | A conditional changed acceptance proposes new terms. A genuine request can leave an offer open, depending on context. | An existing review clause can change the starting point. |
| Signed and fully performed | Executed can mean signed in document usage or fully performed in a performance-status question. Executory means performance remains. | Use the sense the question asks about. |
| Assignment, delegation and novation | Assignment transfers rights; delegation concerns duties. Novation requires the necessary agreement to a valid replacement and extinguishment. | Consent to a transfer is not necessarily consent to release the original obligor. |
| Addendum and amendment | An addendum often adds material; an amendment changes an existing agreement. The actual text, timing and assent control. | A document title is not a legal shortcut. |
| Option and right of first refusal | A supported option grants a purchase choice under its terms. A first-refusal right generally depends on its specified sale trigger. | Read the triggering terms rather than treating every first-refusal right as immediately exercisable. |
| Liquidated damages and specific performance | One concerns agreed monetary relief subject to enforceability; the other seeks equitable enforcement subject to its requirements. | Neither is guaranteed merely because land or a deposit is involved. |
Work through the facts
A counteroffer does not reopen itself
Buyer offers $400,000. Seller responds only on a price of $415,000. Buyer rejects that counteroffer. Seller later tries to accept Buyer’s original $400,000 offer. No option, renewed offer or contrary term is supplied.
- Seller’s conditional price change was a counteroffer, ending the original offer under the stated ordinary-offer rule.
- Buyer rejected the new $415,000 offer. Seller cannot assume the earlier offer is automatically available again.
Answer: A renewed offer or other required assent is needed; the original does not revive automatically.
Distinguish an inquiry
Seller receives a $400,000 offer and asks, 'Would the buyer consider closing one week later?' without conditioning acceptance. Is that necessarily a counteroffer? No already binding agreement or review provision changes the starting point in this example.
- The seller asks for information rather than expressly requiring a changed term.
- A request or inquiry does not necessarily reject the offer.
- The exact language and later action determine whether acceptance occurs.
Answer: No. The question can be an inquiry rather than a counteroffer.
Classify performance status
Buyer and seller signed a valid purchase agreement, but financing, title, closing, payment, and deed delivery remain. Is it executed or executory in the performance-status sense?
- Signatures can establish the agreement.
- Material obligations remain for both parties.
- The tested performance status is executory until full performance.
Answer: The contract is executory.
Separate assignment and novation
A party transfers contractual rights to another person, but the other contracting party never agrees to release the original party's duties. Is release automatic? Assume the stated rights transfer is permitted; do not infer permission for every assignment.
- The facts describe a transfer of rights.
- No agreement to substitute and release is stated.
- Assignment alone does not create an automatic novation or release of every obligation.
Answer: No. The facts support assignment, not an automatic novation.
Analyze a financing contingency
A contract gives buyer a financing contingency, a written-notice deadline, and a stated termination right if financing is not obtained. The deadline passes without the required notice. What controls?
- Identify whom the contingency protects and the exact deadline.
- The contract requires written notice as part of exercising the right.
- The consequence depends on waiver, satisfaction, extension, and other language in the agreement.
Answer: Apply the contract's notice, deadline, waiver, and consequence terms; do not assume automatic termination.
Distinguish option and first refusal
Owner grants Tenant a written, separately supported 60-day option to buy for $300,000 whether or not Owner later wants to sell. Assume the option is valid and its other terms are supplied. Which type of purchase right is described?
- Tenant can exercise during a fixed period on stated terms.
- The purchase choice does not wait for Owner’s later decision to sell, but exercise still must satisfy the actual option’s conditions.
- Those facts fit an option rather than a right of first refusal.
Answer: Tenant holds an option to purchase.
A signature cannot finish the essential bargain
The signed document leaves the essential property and price to a future agreement. The exercise states that no workable identification or agreed objective method supplies those terms.
- The problem is not simply a missing nonessential date or harmless blank.
- There is no supplied method by which a court can identify and enforce the essential bargain without creating it.
Answer: Signatures alone do not establish an enforceable definite purchase bargain on these stated facts.
Separate transferred rights from an extinguished duty
A permitted assignment transfers Buyer’s rights to Assignee. Seller agrees to the transfer but expressly preserves Buyer’s payment obligations. Assignee later fails to pay.
- Seller’s consent to assignment does not contradict the express preservation of Buyer’s duties.
- No agreed extinguishment of the original obligation is supplied.
Answer: Do not treat the assignment as a novation releasing Buyer.
An agreed deposit is not an automatic award
A contract calls a $20,000 deposit liquidated damages. A breach dispute arises. No facts establish the clause’s enforceability, applicable election or proper release authority.
- The label and amount do not complete the liquidated-damages analysis.
- The contract, governing test and escrow-release rules must be analyzed separately; no award or disbursement is approved by this question.
Answer: There is not enough information to declare automatic forfeiture to one party.
An existing review clause changes the question
A purchase contract is already formed and contains an attorney-review condition subsequent. A lawyer makes tentative requests within that review process. The exercise does not supply the full clause or communications.
- The starting point is an existing agreement, not an unaccepted ordinary offer.
- Read the review clause and communications before deciding whether they request changes or invoke a termination right.
Answer: Do not automatically apply an ordinary-offer counteroffer rule to declare the existing contract ended.
A correction needs the stated protections
After parties sign a transaction document, an Illinois licensee plans to change a term. Written direction from all signatories is supplied, but the proposed alteration has not been signed or initialed by all at the time of the change.
- Written consent or direction from all signatories is one protection. Do not rewrite the rule as requiring both consent and direction.
- The separate processing requirement still addresses signatures or initials of all signatories for each alteration at the time, followed by the applicable true-copy duty.
Answer: The written direction does not remove the separate alteration and copy requirements. No document is being changed or approved by this exercise.
An offer competition does not open confidential files
One designated agent represents two clients offering on the same parcel. The agent has reason to know the owner will consider both at the same time. One client asks to be referred to another agent.
- The facts fit the defined contemporaneous-offer rule, so written disclosure to the affected clients is required.
- The requested referral must be made. That process is not permission to share either client’s protected strategy or to assume every same-firm situation has identical roles.
Answer: Provide the required written disclosure and requested referral while safeguarding confidential information.
Mistakes to avoid
- Only a material or price change can defeat acceptance. The applicable strict rule can treat even a minor changed acceptance as a counteroffer. Distinguish a genuine inquiry.
- The original offeror can accept their own rejected offer. Identify who made each offer and who has a power of acceptance at the time asked.
- A signed page proves definite essential terms. Check whether the essential bargain is supplied or left for future negotiation.
- Oral means void in every case. Read the applicable formation, writing, signature and exception rules separately.
- A digital signature makes every document binding. Electronic recognition does not supply authority, assent, consideration or definite terms.
- A signed contract must be fully executed. Use the performance-status meaning when duties remain.
- Assignment always frees the original party. Track delegation, restrictions and an actual agreed extinguishment or release.
- An addendum label overrides the existing contract. Read substance, timing, incorporation, conflicts and required assent.
- A missed financing deadline always cancels the contract. Read its actual notice, waiver, effort and consequence provisions.
- The option holder already owns the land. An option creates a conditional purchase choice, not immediate title.
- Every first-refusal right can be exercised today. Apply the specified trigger and response terms.
- A deposit clause gives the broker authority to pay the winner. Remedy entitlement and lawful escrow release are separate.
- Specific performance is automatic for land. Its equitable and contractual requirements still apply.
- Every accepted offer ends all brokerage assistance. Illinois exclusive-agreement assistance has a signed-agreement and contingency condition; other duties need their own analysis.
- A highest-price offer can be rejected for any reason. Lawful client choices remain subject to nondiscrimination, confidentiality and other applicable duties.
32 mixed questions on contract events and consequences
These are original teaching questions, not recalled or predicted PSI questions. Answer first, then explain why the other choices fail.
1. Under an ordinary offer with no option or contrary provision, Seller communicates acceptance only if the offered price is increased. What response is described?
- Counteroffer
- Novation
- Inquiry
- Acceptance
Show answer and explanation
Answer: A. Counteroffer
A communicated conditional price change proposes new terms rather than an unconditional acceptance. This is an ordinary-offer scenario; do not import the same result automatically into an already formed contract’s review process.
2. Which contract status means material duties remain?
- Executed
- Void
- Rescinded
- Executory
Show answer and explanation
Answer: D. Executory
An executory contract has performance still due.
3. Which transaction substitutes a new party and releases the original party as agreed?
- Addendum
- Novation
- Assignment
- Counteroffer
Show answer and explanation
Answer: B. Novation
Novation involves agreed substitution and release rather than a rights transfer alone.
4. Which remedy seeks the promised performance rather than a money award?
- Earnest money credit
- Specific performance
- Compensatory damages
- Liquidated damages
Show answer and explanation
Answer: B. Specific performance
Specific performance is equitable relief compelling contract performance when legally available.
5. Which right can generally be exercised on stated terms during its option period without waiting for the owner to decide to sell?
- Option
- Easement
- License
- Right of first refusal
Show answer and explanation
Answer: A. Option
An option grants a time-limited power to purchase on stated terms.
6. An offeree asks whether a later closing would be convenient, without making agreement conditional on that change. What is the best classification on these facts?
- A recorded deed
- A possible inquiry, rather than necessarily a counteroffer
- An automatic novation
- An automatic breach
Show answer and explanation
Answer: B. A possible inquiry, rather than necessarily a counteroffer
A genuine request does not necessarily reject an offer. Read the communication in context; wording and an applicable existing agreement or review clause can matter.
7. Under the applicable strict acceptance rule, a purported acceptance changes the offer’s terms but calls the change minor. Is minor alone enough to make it an unconditional acceptance?
- Yes, if the paper is signed
- Yes, because only price can matter
- No; even a minor changed acceptance can be a counteroffer
- Yes, every minor change is harmless
Show answer and explanation
Answer: C. No; even a minor changed acceptance can be a counteroffer
Finnin illustrates strict acceptance even where changes were characterized as minor. Its dealership-stock context should not be converted into a universal goods rule or a result for every existing option or contract-review clause.
8. A signed paper leaves essential property and price terms for future negotiation, with no workable agreed method to supply them. What is the key problem?
- The essential bargain is insufficiently definite on the supplied facts
- Every deposit cures it
- Every blank is fatal
- Every signature is forged
Show answer and explanation
Answer: A. The essential bargain is insufficiently definite on the supplied facts
A court needs sufficiently definite essential terms to identify the agreement and an appropriate remedy. The question expressly excludes an objective agreed method; it does not say every missing nonessential term makes a contract fail.
9. Actionable fraud in the inducement gives a protected party a right to avoid the agreement under the rule supplied in the question. Which classification fits?
- Automatically fully performed
- Always void for every type of fraud
- Voidable
- A valid novation
Show answer and explanation
Answer: C. Voidable
A protected power to avoid describes voidability. The question supplies that governing effect; do not equate fraud in the inducement with every other alleged defect or assume ratification and other defenses never matter.
10. An applicable statute of frauds requires signed written evidence of a land agreement. What should the candidate avoid assuming?
- That exceptions and the exact statute should be examined
- That every oral agreement is automatically void for every purpose
- That signed evidence can matter
- That the party to be charged matters
Show answer and explanation
Answer: B. That every oral agreement is automatically void for every purpose
A writing defense and abstract formation are different questions. Illinois section 2 refers to the contract or a memorandum or note and the required signature or written agent authority, with its statutory context and exceptions.
11. For a transaction within Illinois UETA’s scope, can electronic form alone be the reason to deny legal effect?
- Yes, whenever the document concerns land
- No; legal recognition still leaves agreement, attribution and other substantive requirements to be checked
- Yes, every electronic record is void
- No, therefore every digital file is automatically a contract
Show answer and explanation
Answer: B. No; legal recognition still leaves agreement, attribution and other substantive requirements to be checked
UETA sections 5, 7 and 9 address agreement to transact electronically, recognition and attribution. They do not supply missing assent, authority, consideration or an essential bargain, and their scope and other applicable law still matter.
12. A PDF displays a person’s name, but whether that person adopted the signature is genuinely disputed. What is missing from an electronic-signature conclusion?
- Proof that paper signatures never count
- Attribution and the record’s context and legal effect
- A broker’s decision to ignore identity
- Proof that all PDFs are void
Show answer and explanation
Answer: B. Attribution and the record’s context and legal effect
Section 9 attributes a record or signature when it is that person’s act; context, surrounding circumstances and the parties’ agreement affect its legal effect. A displayed name alone does not decide the disputed facts.
13. Seller permits an assignment but expressly preserves the original Buyer’s obligations. What follows?
- Seller must forgive every payment
- Every assignment is a novation
- Assignee acquires more rights than any party had
- Consent to the transfer does not itself release Buyer
Show answer and explanation
Answer: D. Consent to the transfer does not itself release Buyer
Assignment, delegation and release are different. The express preservation of obligations defeats an assumption that consent to assignment necessarily extinguished the original obligation.
14. Competent parties exchange sufficiently definite lawful promises to buy and sell. No earnest-money deposit is required by their supplied contract. Which is most accurate?
- The broker must supply consideration
- Mutual promises can supply consideration; no universal deposit requirement should be invented
- No consideration can exist without cash
- The property has already transferred by deed
Show answer and explanation
Answer: B. Mutual promises can supply consideration; no universal deposit requirement should be invented
Legal consideration is not identical to an earnest-money check. The question supplies a promise exchange and no deposit condition; other required formation and enforceability elements still have to be present.
15. A financing clause gives a written-notice deadline, but the full clause and waiver terms are not supplied. Financing is not obtained. What controls the consequence?
- Automatic forfeiture to the broker
- Automatic termination in every case
- The actual event, notice, deadline, waiver and consequence provisions
- Every closing-disclosure deadline
Show answer and explanation
Answer: C. The actual event, notice, deadline, waiver and consequence provisions
A contingency’s failure and a party’s method for exercising a right are separate. The question does not provide enough language to announce one universal cancellation or deposit result.
16. A contract already exists and its attorney-review clause operates as a condition subsequent. A lawyer proposes changes. Which starting point is correct?
- Analyze the existing agreement, its review clause and the communication
- There can never have been a contract
- The proposal automatically transfers title
- Every request is a new ordinary offer
Show answer and explanation
Answer: A. Analyze the existing agreement, its review clause and the communication
Patel analyzed an already formed real estate agreement and its particular review language. It does not create a universal review period or make a disclaimer alone preserve every contract; the appeal resulted in reversal and remand, not final specific performance.
17. A supported option lets Holder choose to buy at a stated price within sixty days without waiting for Owner to decide to sell. Which statement fits?
- Holder has a purchase choice subject to the option’s terms
- Holder already owns the land
- Holder must buy in every option contract
- Holder has only a typical untriggered first-refusal right
Show answer and explanation
Answer: A. Holder has a purchase choice subject to the option’s terms
The facts supply a valid supported option. Exercise still must satisfy the actual terms; the keep-open promise, underlying purchase bargain and later conveyance are separate.
18. A document instead requires a tenant to buy at the later closing, subject to stated conditions, rather than merely choosing whether to exercise a purchase right. Which distinction matters?
- Every first-refusal right is unconditional
- The heading alone controls
- Every lease tenant owns the property
- A purchase obligation differs from an optional purchase right
Show answer and explanation
Answer: D. A purchase obligation differs from an optional purchase right
Read the operative promise and conditions. A lease-purchase obligation and a lease option can have different effects; their labels alone do not determine enforceability or the tenant’s actual duties.
19. A clause is headed liquidated damages. Does that heading establish enforceability?
- No; the governing test, agreement and circumstances still matter
- Yes, because a penalty label is optional
- Yes, whenever earnest money exists
- Yes, in every contract
Show answer and explanation
Answer: A. No; the governing test, agreement and circumstances still matter
Illinois authority examines intent, anticipated harm and difficulty of proving actual loss under the applicable test, rather than relying on a heading. There is no universal deposit percentage safe harbor.
20. Why should a land-contract buyer avoid assuming specific performance is guaranteed?
- It is the same as a deposit receipt
- It is a utility charge
- It never concerns land
- It is equitable relief with contractual and legal requirements
Show answer and explanation
Answer: D. It is equitable relief with contractual and legal requirements
The agreement, readiness and ability to perform, defenses and equitable requirements matter. Do not infer an automatic award or duplicative recovery merely from the fact that the subject is real estate.
21. Before performance is due, an otherwise unexcused party definitely and unequivocally says they will not perform. Which issue is raised?
- Automatic novation
- Anticipatory repudiation
- A completed conveyance
- Every uncertain expression of concern
Show answer and explanation
Answer: B. Anticipatory repudiation
A definite, unequivocal refusal differs from an ambiguous statement considered in context. Kelly reversed on pleading and insufficient repudiation evidence; it did not decide every remaining remedy or make every worried message a breach.
22. After a breach, the injured party seeks compensatory damages. Which general mitigation principle is relevant?
- The injured party must take every conceivable step
- Reasonable ordinary-care efforts can limit avoidable damages; reasonable mitigation expenses are a separate issue
- Any avoidable loss is automatically payable
- Mitigation always means surrendering every right
Show answer and explanation
Answer: B. Reasonable ordinary-care efforts can limit avoidable damages; reasonable mitigation expenses are a separate issue
The civil instructions distinguish avoidable loss and reasonable mitigation effort and expense. Actual damages, burden and remedy availability depend on the contract, law and evidence; this is not an award calculation.
23. After formation, the parties validly agree to change the closing date. The paper is titled Addendum. What matters most?
- Its substance, timing, assent and applicable modification requirements
- It must be ignored because of its heading
- Every attachment automatically ends the contract
- Its title overrides all operative language
Show answer and explanation
Answer: A. Its substance, timing, assent and applicable modification requirements
A later change can function as an amendment despite a document title. Required agreement, consideration where applicable, signed-document duties and enforceability requirements remain separate questions.
24. An Illinois licensee proposes a change to a signed transaction document. Which describes the two relevant protections in rule 1450.775(b)?
- No signatures or initials can ever be used
- Written consent or direction from all signatories, and each processed alteration signed or initialed by all at the time
- Written consent and direction from only the buyer are enough
- One party’s oral request is always enough
Show answer and explanation
Answer: B. Written consent or direction from all signatories, and each processed alteration signed or initialed by all at the time
The first rule uses consent OR direction from all signatories. The separate processing rule requires each addition, deletion or alteration to be signed or initialed by all signatories at the time. These protections apply to physical and electronic written agreements.
25. Assume UETA’s default receipt rule applies, with no different agreement or known failure. A processable record enters the recipient’s designated, retrievable system at 4:59 p.m.; the person reads it at 5:30 p.m. Which fact controls receipt in this supplied comparison?
- System receipt at 4:59 p.m. under the stipulated conditions
- Only personal reading at 5:30 p.m.
- Every email always forms a contract when sent
- Only a later paper copy
Show answer and explanation
Answer: A. System receipt at 4:59 p.m. under the stipulated conditions
The question supplies the statutory system, retrieval and processing conditions. Section 15(e) does not require individual awareness for receipt under the applicable default. This answers receipt only, not whether every requirement for a binding contract was met.
26. Under Illinois section 15-75(2), does offer-related assistance under an exclusive brokerage agreement end merely because the purchase agreement is signed?
- Yes, even with unresolved contingencies
- Yes, every duty ends at signature
- No; the stated assistance continues until the agreement is signed and all contingencies are satisfied or waived
- No; the broker guarantees that every transaction closes
Show answer and explanation
Answer: C. No; the stated assistance continues until the agreement is signed and all contingencies are satisfied or waived
The statute joins signing and the satisfaction or waiver of all contingencies. Presentation and answering questions are separate minimum services; this timing clause is not universal permission to end every other duty.
27. The same designated agent represents two clients making offers on the same unit and knows the owner’s representative will consider them at the same time. What does Illinois rule 1450.830 require?
- Disclose each client’s confidential price strategy to the other
- Written disclosure to the affected clients and referral to another designated agent on request
- Automatically accept whichever offer arrived first
- Treat every different agent in the firm as the same agent
Show answer and explanation
Answer: B. Written disclosure to the affected clients and referral to another designated agent on request
The supplied facts meet the defined contemporaneous-offer trigger: two or more clients, the same designated agent, the same parcel or unit, and known or reasonably known simultaneous consideration. Written notice may be physical or electronic; requested referral and confidentiality remain important.
28. Must a seller always accept the highest-price offer?
- No, so every discriminatory rejection is permitted
- No; lawful client choices can consider terms while applicable duties and nondiscrimination rules remain
- Yes, because price is the only lawful consideration
- Yes, because it arrived first
Show answer and explanation
Answer: B. No; lawful client choices can consider terms while applicable duties and nondiscrimination rules remain
Financing, conditions and other lawful terms can matter. A seller’s decision does not excuse prohibited discrimination, mishandling offers or unauthorized disclosure of confidential information.
29. A person initials a correction to an Illinois transaction document. No exception changes the rule. What true-copy timing does rule 1450.775(c) state for that person?
- Always after thirty days
- Only if every term changed
- Within 24 hours after signing or initialing the correction
- Only when the broker later chooses to close
Show answer and explanation
Answer: C. Within 24 hours after signing or initialing the correction
A true copy of the original or corrected document is delivered within 24 hours after signing or initialing the original or correction to the person signing or initialing it. Do not turn the trigger into acceptance, closing or a request for a copy.
30. An Illinois sponsoring broker has actual knowledge of competing claims to earnest money, with no authorized resolution supplied. What should the broker avoid?
- Preserving the disputed funds pending an authorized disposition
- Checking the governing escrow requirements
- Recognizing that custody and entitlement differ
- Choosing the winner and disbursing on the broker’s own breach decision
Show answer and explanation
Answer: D. Choosing the winner and disbursing on the broker’s own breach decision
The disputed-funds rule applies to written notice or actual knowledge of the controversy. The broker should follow the applicable authorized resolution process rather than adjudicating the contract dispute. The question does not say all possible authorized routes require an identical private release.
31. A person knows of an offer requesting completion of a specified act as acceptance and completes that act under its terms. Which acceptance structure is described?
- A required return promise in every case
- Acceptance by requested performance in a unilateral-offer structure
- A rule that all beginning performance is legally irrelevant
- An automatic novation of every other agreement
Show answer and explanation
Answer: B. Acceptance by requested performance in a unilateral-offer structure
The supplied offer requests performance. Do not add a promise-only requirement or infer that this answer decides all beginning-performance protections, revocation questions, consideration issues or property transfers.
32. An ordinary offer expressly requires acceptance to be received by 5 p.m. Friday. No option, extension, exception or revival is supplied. The first attempted acceptance is received at 9 a.m. Saturday. What follows under these stated terms?
- Every late response automatically conveys title
- It is not timely acceptance of that expired offer
- Sending can never matter in any other contract
- The original offer must stay open forever
Show answer and explanation
Answer: B. It is not timely acceptance of that expired offer
The exercise expressly supplies a receipt deadline and no modifying facts. A later response may need fresh assent under the applicable context; it does not automatically revive the original offer or prove a land contract. No private legal calendar is computed here.
Common questions
How many Contracts questions are on the national broker exam?
The PSI outline effective June 24, 2026 allocates 19% of the 100 scored national broker questions to Contracts as a whole. That does not predict which individual contract topics or questions a candidate will see.
The practice-set length here is an editorial teaching choice. It is not an official PSI set or a validated pass predictor.
What should I check first in a contract question?
Identify what already exists: negotiations, an ordinary offer, a supported option or a formed agreement. Then put the stated communications, receipt times, conditions and performance events in order.
Ask for the contract’s status at the time specified. A later closing result should not be imported into an earlier acceptance question.
What are the usual formation and enforceability issues?
Look for sufficiently definite essential terms, assent, competent parties, lawful purpose, consideration and authority. Then examine any applicable writing, signature, notice or other enforceability requirement.
The distinction matters. A signature cannot invent an essential bargain left for future negotiation, and a writing defense does not automatically make every oral agreement void for every purpose.
How are void, voidable and unenforceable different?
Void describes no legal effect under the applicable analysis. Voidable means a protected party can avoid an agreement under the governing facts and rules. Unenforceability concerns a legal obstacle to judicial enforcement.
Do not classify every fraud, capacity or mistake allegation the same way. Ratification, risk allocation, timing and other defenses can matter; these questions supply the effect where necessary rather than deciding a private dispute.
Does a counteroffer always require a large change?
No. Under the applicable strict acceptance rule, even a minor changed acceptance can fail to accept the offer. A genuine inquiry is different from requiring new terms as a condition of agreement.
Finnin concerned a dealership-stock transaction. Patel concerned an already formed real estate agreement and a particular attorney-review clause. Their different starting points matter; neither should be reduced to every change harmless or every request ends a contract.
Can a rejected offer automatically be accepted later?
Not merely because someone returns to its old price. Track who made the original offer, who had a power to accept and whether a counteroffer, rejection, expiration or effective revocation ended that power.
A supported option or a contrary controlling provision requires separate analysis. In the ordinary-offer example here, a renewed offer or required new assent is needed rather than automatic revival.
Is earnest money required for every valid contract?
No universal cash-deposit requirement should be invented. Mutual promises can supply consideration in a bilateral bargain. Earnest money has its own contractual amount, delivery, default and escrow consequences.
A particular agreement can make a deposit a condition or impose a deadline. Read those terms rather than claiming that an absent check always prevents formation or never matters.
Does signed mean executed or executory?
Executed legitimately can mean signed in document usage. In a performance-status question, fully executed means the parties have completed performance, while executory means material duties remain.
A valid signed purchase contract with financing, payment, closing and deed delivery still to occur is executory in the performance sense. Answer the meaning the question asks about.
What is the difference between bilateral and unilateral?
A bilateral bargain exchanges promises. A unilateral offer calls for the requested performance as acceptance. The actual offer and the governing law determine what conduct matters.
Do not assume every option, brokerage arrangement or reward has the same structure, or that every unilateral offer is freely revocable until the final moment. Beginning performance and other protections can require additional analysis.
How do assignment, delegation and novation differ?
Assignment transfers rights, subject to restrictions and applicable law. Delegation concerns duties. Novation requires a valid existing obligation, the necessary parties’ agreement, a valid replacement and extinguishment of the original obligation.
A new buyer, payer or permitted assignment does not prove release. Read what the parties agreed and whether the original obligation was actually extinguished; consent to assignment is not necessarily consent to a novation.
Does a financing contingency failure cancel the contract?
Read the clause. The event, required effort, deadline, notice, satisfaction, waiver, extension and stated consequence all matter. A buyer’s failure to obtain financing is not a universal automatic cancellation or deposit-forfeiture rule.
Conditions can also raise prevention or interference issues. These exercises do not approve a loan, decide a private notice deadline or tell a party to terminate an agreement.
Is an attorney-review request a counteroffer?
First ask whether an agreement already exists and what its review clause says. A proposal under an existing condition subsequent needs a different analysis from conditional acceptance of an ordinary offer.
There is no universal review period supplied by this page. The actual clause and communications control; a label or disclaimer alone does not settle every result.
Are addenda and amendments determined only by the heading?
No. An addendum often adds material, and an amendment changes an existing agreement. The document’s substance, timing, incorporation, conflicts and required assent matter more than a caption.
Illinois licensee duties for signed-document alterations remain separate. Do not assume an attachment becomes effective without the agreement and formal requirements that apply to it.
Does Illinois still use the Electronic Commerce Security Act?
That earlier statute was repealed effective June 25, 2021. Current Illinois electronic-transaction analysis uses the Uniform Electronic Transactions Act, 815 ILCS 333, within its scope, along with other applicable law.
Sections 5, 7 and 9 address agreement to transact electronically, recognition and attribution. Electronic form does not supply missing authority, assent, consideration or definite terms. Federal E-SIGN has its own scope, retention and consumer-disclosure provisions.
Does a liquidated-damages clause guarantee forfeiture?
No. The governing enforceability test, contract and facts matter. Illinois decisions examine the required intent, reasonableness in relation to anticipated harm and uncertainty or difficulty of proving actual loss under the applicable test.
There is no universal percentage safe harbor for deposits. Entitlement to a remedy and lawful release of disputed earnest money are separate; a broker does not resolve the dispute simply by reading a clause’s title.
Is specific performance automatic for real estate?
No. It seeks equitable enforcement of the promised performance and has its own requirements, contractual limits and defenses. Readiness, ability to perform and the actual agreement and circumstances matter.
Do not assume a court must award it merely because land is involved, or that every damages claim can be added without duplication or an election issue. The remedy questions here do not determine an actual award.
How should I use my score on this page?
Review every missed or uncertain answer. Rebuild the timeline, name the controlling condition and explain why the strongest distractor fails. Correct guesses need review too.
A percentage on this original set is not a validated readiness threshold. Repeating a memorized set does not show the same understanding as reasoning through a new situation.
Where can I continue practising?
Use the linked contract-status, offers and assignment guides to repair the concept behind a mistake. Then try a fresh question and explain the event that changes the answer.
Downloading Pass Illinois is optional. Property Ownership practice is free; full access is paid. The app provides exam preparation, not approved pre-license education, and this web practice remains available.
When is an electronic notice received?
Read the agreement and the applicable law. UETA section 15 has default system, retrieval and processing conditions and distinguishes receipt from a person’s awareness. A known failure and an agreed variation can require different analysis.
In the supplied comparison, a processable record enters the designated retrievable system at 4:59 p.m. and is read at 5:30 p.m. The question supplies the default conditions, so receipt is not postponed solely until personal reading. This does not decide whether a contract was formed or every notice requirement was met.
What Illinois rules apply to a signed-document change?
Rule 1450.775(b) first requires written consent or direction from all signatories for a licensee’s addition, deletion or alteration. Its separate processing protection requires each alteration to be signed or initialed by all signatories at the time.
The true-copy duty in subsection (c) runs within 24 hours after signing or initialing the original or correction, to the person signing or initialing it. The rule applies to physical and electronic written agreements. It is not a ban on every unused blank or permission to fill intended terms after signing.
What should I notice in an Illinois multiple-offer question?
Track whose client each person is and who knows what. Rule 1450.830 concerns two or more clients of the same designated agent, the same parcel or unit, and offers the agent knows or has reason to know the owner or representative will consider at the same time. It requires written disclosure and a requested referral.
General offer-presentation duties, exclusive-agreement minimum services, confidentiality and nondiscrimination must be read together. Do not assume an identical trigger for every agent in one firm, that the first or highest offer must win, or that competing offers authorize disclosure of confidential terms.
Can a broker draft the legal remedy or decide a deposit dispute?
A real estate license is not unlimited authority to draft legal rights, deeds, mortgages or bespoke remedy provisions. The narrow preliminary-form role recognized in Illinois authority is different from providing legal advice or custom drafting. Current written-agreement rules still apply.
A broker holding a known earnest-money controversy must follow the escrow rules and an authorized disposition. Reading a contract clause is not authority to act as the court and award the funds. These exercises do not instruct anyone to terminate, amend, sign, release or enforce a real contract.
Keep practising
Your next practice step
Bring the national topics together
Move from a topic exercise to a longer national session, then review the explanations and topic report.
These web resources are free. The app has a separate free starter tier and optional paid full access.
Official sources and scope
Reviewed for October 2026 against the public PSI outline and identified primary Illinois and federal sources. The evidence records actual statutory passages and prior judicial readings reused, including each reading’s limits. These are original teaching scenarios, not official PSI questions. A particular contract, notice, modification, remedy or escrow release requires the actual documents and applicable law.
- Illinois Courts contract instructions: breach, election, damages and mitigation
- California DRE glossary: executory, constructive notice and tenancy in common
- Doyle v. Holy Cross Hospital, 186 Ill. 2d 104 (1999)
- Whitelaw v. Brady, 3 Ill. 2d 583 (1954): option structure and writing
- Michigan Wacker, 2018 IL App (1st) 171222: commercial extension-option notice
- Kelly v. Orrico, 2014 IL App (2d) 130002: unequivocal repudiation
- Midwest Builder Distributing v. Lord and Essex (2007): conditions and interference
- Karimi v. 401 North Wabash Venture, 2011 IL App (1st) 102670
- Siwik v. Jasmine Enterprises Incorporated, 2026 IL App (3d) 250593
- Lobo IV, LLC v. V Land Chicago Canal, LLC, 2019 IL App (1st) 170955
- YPI 180 N. LaSalle: assigned purchase rights and retained obligations
- Pielet v. Pielet: four novation elements and proof of extinguishing intent
- Quinlan and Tyson, 34 Ill. 2d 116 (1966), majority pages 120-123: narrow preliminary-form role; opinion reproduced by Justia
- 225 ILCS 454/15-15: client duties
- 225 ILCS 454/15-75: exclusive-agreement minimum services
- 68 Ill. Adm. Code 1450.830: defined contemporaneous offers
- 68 Ill. Adm. Code 1450.800: confidentiality safeguards
- 775 ILCS 5/3-102: covered conduct, advertising and discriminatory effects
- 68 Ill. Adm. Code 1450.750: escrow, transfers, release, records and supervision
- Finnin v. Bob Lindsay: strict acceptance despite changes called minor
- Patel v. McGrath: tentative requests and an existing review clause
- Deutsche Bank v. Hart: void and voidable distinctions
- Academy Chicago Publishers v. Cheever: sufficiently definite essential terms
- King v. Rossi, 2020 IL App (3d) 190086: actual ROFR terms, notice and counterproposal
- PSI June 24, 2026: National V Contracts
- 740 ILCS 80/2: covered land agreements and signed evidence
- 815 ILCS 333/3, /5, /7, /8 and /9: UETA scope, electronic agreement, recognition, retention and attribution
- 815 ILCS 333/20.87: repeal of the former electronic-commerce statute
- 68 Ill. Adm. Code 1450.775: signed documents and true copies
- 15 U.S.C. 7001: electronic recognition, preservation and consumer disclosures
- 815 ILCS 333/15: electronic sending and receipt
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.