Contracts and Illinois agency duties
Multiple offers and counteroffers: keep each decision and deadline separate
A seller can receive several proposals without having several contracts. The risk comes from losing track of which terms are still open, what a response actually says and who has authority to decide. Follow each offer separately, then apply the representation and disclosure duties.
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The short answer
A seller is not automatically required to accept the first or highest offer. The seller makes a lawful choice among complete terms, subject to existing obligations. A response conditioned on different terms is a counteroffer rather than acceptance; an invitation to improve offers is not necessarily either one. In Illinois, timely presentation, exclusive-agreement minimum services, confidentiality and competing-client disclosure have distinct requirements. A backup agreement can already impose obligations even though its priority or performance depends on the primary contract ending.
Reviewed for October 2026. PSI national V.C expressly concerns proper handling of multiple offers and counteroffers. The whole Contracts category has 19 of the 100 scored national broker questions; that is not a quota for this page. Illinois statutes and adopted rules supply the stated state duties. The scenarios and questions are original; actual contract wording, authority, notice and formation facts control a private transaction.
Five checks for a crowded offer file
- Separate the chains. For each buyer, record the offer, deadline, response, any replacement terms and required delivery or receipt. A document titled acceptance can still condition assent on different terms. A request for information is not necessarily a counteroffer.
- Separate the decisions. The client chooses the lawful strategy and response; the licensee presents information, explains relevant differences and acts within authority. Compare price, credits, financing, contingencies, dates and performance risks without using prohibited discriminatory criteria.
- Apply the actual duties. Section 15-15 requires timely presentation unless its waiver qualification applies. Section 15-75 separately requires specified minimum services under exclusive brokerage agreements, including offer presentation and assistance until signing and satisfaction or waiver of all contingencies. Do not treat a convenience policy as a blanket exemption from statutory duties.
- Protect the correct information. Safeguard client confidences and communicate honestly. A buyer's submitted offer terms are not automatically subject to a confidentiality promise from every recipient. Check the relationships, law and actual agreements before disclosure; do not invent competing bids or reveal a client's protected ceiling merely to increase another bid.
- Check the special conditions. Same-agent contemporaneous offers require the specified written notice and requested referral. An escalation formula needs its actual trigger, base, increment, cap and comparison basis. A backup agreement needs its actual binding effect, priority, performance and termination terms. Preserve the authorized documents and communications.
| What happened? | What to check | Avoid this assumption |
|---|---|---|
| Client receives several offers | Complete terms, lawful client choice and presentation duties | Highest price must win |
| Response requires a changed price or closing term | Conditional counteroffer and effective communication | A signature alone means acceptance |
| Recipient asks whether a change might be considered | Actual conditional or unqualified wording | Every question is a counteroffer |
| Offer requires acceptance received by a deadline | The required receipt event and agreed method | Sent before the deadline necessarily means timely |
| Same designated agent has competing same-property clients | Knows or has reason to know of concurrent consideration | Only actual admission of knowledge triggers notice |
| Seller signs a backup agreement | Present obligations versus contingent priority or performance | No obligation exists until it becomes primary |
| Licensee changes a signed document | All-signatory written consent or direction and required signatures or initials | A cleaner typed copy can silently replace authorized terms |
| A signer needs a true copy | That person's signing or initialing event | Everyone's clock starts with the last signature |
The distinctions that matter
| Distinction | How it works | What to notice |
|---|---|---|
| Highest price and best lawful terms | Price is one term. Credits, contingencies, timing and performance risks may change the client's evaluation. | The broker does not choose a winner solely to improve the broker's compensation. |
| Acceptance and counteroffer | An acceptance must assent to the offered terms under the applicable formation rules. A conditional change proposes different terms. | Calling a change minor does not automatically make the response an acceptance. |
| Counteroffer and inquiry | A conditional response differs from a genuinely unconditioned acceptance or request for information. | Read the actual words and any existing review provision rather than relying on a polite tone. |
| Counteroffer and amendment | A counteroffer concerns proposed formation; an amendment modifies an existing agreement with the necessary assent. | Do not automatically erase an existing contract because someone proposes a change. |
| Expiration and closing | One concerns the time for effective acceptance; the other concerns later performance if a contract forms. | Signing before an offer deadline is not enough if the offer also requires timely receipt. |
| Multiple offers and contemporaneous offers | Several offers can arrive through unrelated agents. The Illinois contemporaneous-offer rule addresses competing clients of the same designated agent under its specific same-property and concurrent-consideration conditions. | Same firm alone is not the complete trigger. |
| Notice and permission to disclose terms | Written competing-client notice informs the affected clients about the situation. It does not authorize sharing protected bargaining information. | Notice of competition is not a release of a client's price ceiling. |
| Backup status and binding agreement | An agreement can impose present obligations while making priority or performance contingent. | Do not assume either that a backup is nonbinding or that it automatically displaces the primary contract. |
Work through the facts
A lower price with different risks
Offer A is $5,000 higher but has a home-sale contingency. Offer B supplies the seller's preferred closing date and different supported performance terms. Assume no existing contract or unlawful discriminatory criterion requires a different analysis.
- The client can compare the complete terms.
- Neither the higher number nor the broker's personal preference automatically decides.
Answer: The seller can lawfully prefer B on the supplied facts. Do not guarantee either buyer's performance or treat the choice as permission to discriminate.
The changed closing date
The buyer offers a June 10 closing. The seller responds in a separate signed writing that conditions agreement on June 28. Assume the other formation and delivery facts are as stated.
- The response requires a different term.
- It does not unconditionally accept the offered closing date.
Answer: This is a counteroffer. Its effect is not changed by calling the response an acceptance. Authorized document handling remains a separate duty.
The offer required receipt
The supplied offer expressly requires acceptance to be received in the designated system by 5:00 p.m. local time. It is signed at 4:50, sent at 4:59 and received there at 5:01. No contrary agreement, exception or later assent is supplied.
- The required event is receipt, not merely signing or sending.
- The stipulated receipt occurs after the stated deadline.
Answer: That communication does not satisfy the offer's timely-receipt condition. This example does not impose one universal sending-or-receipt rule on every contract.
Compare the supplied credits
Offer A is $520,000 with a $10,000 seller credit. Offer B is $516,000 with a $2,000 seller credit. For this comparison, all other relevant costs and terms are equal.
- A: $520,000 - $10,000 = $510,000.
- B: $516,000 - $2,000 = $514,000.
Answer: B is $4,000 higher on the stipulated price-minus-credit measure. These figures are not complete closing proceeds when other costs differ or are unknown.
Use the actual escalation formula
An exercise supplies a $500,000 base offer, a $2,000 increment and a $520,000 cap. Its express formula is the greater of the base and qualifying competing amount plus the increment, limited to the cap. The qualifying amount is $514,500 on the defined comparison basis.
- $514,500 + $2,000 = $516,500.
- The result exceeds the base and is below the cap.
Answer: The supplied formula gives $516,500. Proof, qualification, acceptance and other terms are separate; an arithmetic result does not guarantee a winning offer.
The same formula reaches its cap
Use the same express base, increment and capped formula, but a qualifying competing amount of $519,000.
- The increment would produce $521,000.
- The express formula limits the result to $520,000.
Answer: The stipulated price is $520,000. It does not beat the competing amount by the full increment and does not guarantee acceptance. Another clause's wording could produce a different legal result.
Reason to know is enough for the stated trigger
The same Illinois designated agent represents two buyer clients preparing offers on the same unit. The facts give the agent reason to know the owner's representative will consider those offers together, even though the agent denies actual knowledge.
- The rule uses knows or has reason to know.
- The same-agent, clients, property and concurrent-consideration conditions are supplied.
Answer: Provide the required written disclosure to the affected clients and make the required referral if requested. Actual knowledge is not the only stated trigger.
A notice does not release a confidence
After giving the competing-client notice, an agent proposes telling one buyer the other buyer client's protected maximum price. Assume no authorization or other lawful exception permits it.
- The price ceiling is protected client information on the stated facts.
- The notice does not itself authorize its disclosure.
Answer: Do not reveal the protected ceiling. Follow the applicable confidentiality and requested-referral duties separately.
The backup is already signed
A properly formed backup agreement expressly imposes specified present notice obligations while making primary priority contingent on the first contract ending. The buyer says no obligation can exist until activation.
- The agreement's stated present obligations and contingent priority are different.
- The condition does not erase every promise already made.
Answer: Apply the actual backup terms. Do not assume free withdrawal, automatic activation or displacement of the primary agreement.
The first signer's copy clock
Signer A signs at 10:00 a.m. Monday. Signer B signs at 10:00 a.m. Tuesday. A true copy is first delivered to A at 10:30 a.m. Tuesday. Assume the example concerns the licensee's Rule 1450.775(c) obligation and no earlier delivery occurred.
- A's signing event was 24 hours 30 minutes before the stated delivery.
- B's later signature does not restart A's individual clock.
Answer: The stated delivery to A misses the 24-hour copy requirement. That compliance conclusion does not by itself decide the contract's formation, enforceability or remedy.
Mistakes to avoid
- The first or highest bid must be accepted. Apply lawful client choice and existing obligations, not an automatic auction rule.
- A busy file lets the agent hold an offer to favor a preferred buyer. Apply timely-presentation and exclusive minimum-service duties; do not substitute the agent's interests.
- Every response with a signature accepts the offer. Read whether assent depends on different terms and whether required communication occurred.
- An unsuccessful counter automatically restores the original offer. Do not assume revival; a new offer or different agreement must be established.
- A best-and-final invitation promises everyone another chance. An invitation is not automatically a binding counteroffer or a commitment to a further round.
- All submitted prices are automatically secret, or all may always be shared. Identify client confidences, law, actual agreements and disclosure authority.
- Competing clients means the agent can exchange their limits. Required notice and confidentiality are distinct duties.
- A backup cannot bind anyone until it becomes primary. Read its present obligations and contingent terms.
- Everyone gets 24 hours from the final signature. The true-copy rule runs from each relevant signing or initialing event for that person.
Check your understanding
These are original teaching questions, not recalled or predicted PSI questions. Answer first, then explain why the other choices fail.
1. Three offers arrive, and no existing obligation dictates acceptance. Which rule generally applies to the seller's decision?
- The seller makes a lawful choice among the complete terms
- The highest headline price must win
- The first must win
- The broker selects the winner
Show answer and explanation
Answer: A. The seller makes a lawful choice among the complete terms
There is no automatic first-or-highest acceptance rule. Existing contracts and applicable law, including nondiscrimination duties, still matter.
2. A seller's separate signed response conditions agreement on a changed closing date. What is it?
- An unconditional acceptance
- An automatic amendment of an already formed contract
- A counteroffer
- A statutory option
Show answer and explanation
Answer: C. A counteroffer
The response requires a different term. A signature or acceptance heading does not remove the condition. Actual formation and document-handling requirements remain relevant.
3. A buyer rejects the seller's counteroffer. May the buyer assume the original offer is automatically open again?
- Yes, if it had the lower price
- Yes, rejection always revives it
- No, revival or a new offer must be established
- Yes, regardless of its own expiration
Show answer and explanation
Answer: C. No, revival or a new offer must be established
Under the ordinary counteroffer rule, do not presume automatic revival of the prior offer. Read the actual chain, any preserved terms and later assent.
4. The offer expressly requires receipt by 5:00 p.m. Acceptance is sent at 4:59 but received at 5:01. No contrary agreement or exception applies. Which event controls this supplied condition?
- The signer's earlier private decision
- The subject's asking-price publication
- The stipulated receipt time
- The later closing date
Show answer and explanation
Answer: C. The stipulated receipt time
The express timely-receipt requirement controls the example. This is not a universal mailbox or email rule for every agreement.
5. For a price-minus-credit comparison only, all other terms and costs are equal. A is $520,000 less $10,000; B is $516,000 less $2,000. Which is greater?
- A by $10,000
- A by $4,000
- B by $4,000
- They are equal
Show answer and explanation
Answer: C. B by $4,000
A gives $510,000 and B $514,000 on the specified measure. This is not a complete closing-proceeds calculation where other costs differ.
6. Use an express formula: min($520,000, max($500,000, qualifying amount + $2,000)). The qualifying amount is $514,500. What results?
- $514,500
- $522,000
- $516,500
- $520,000
Show answer and explanation
Answer: C. $516,500
The increment gives $516,500, above the base and below the cap. The exercise stipulates the comparison basis and formula, not that every escalation clause uses them.
7. Under the same express formula, the qualifying amount is $519,000. What results?
- $522,000
- $519,000
- $520,000
- $521,000
Show answer and explanation
Answer: C. $520,000
The uncapped sum is $521,000, but the express cap gives $520,000. It does not preserve the full $2,000 lead or guarantee acceptance.
8. One Illinois designated agent represents two buyer clients on the same parcel and has reason to know their offers will be considered together. Which fact matters?
- Only an admission of actual knowledge can trigger the rule
- A different designated agent is always presumed
- Reason to know satisfies that part of the stated notice trigger
- The rule applies only to offers for different parcels
Show answer and explanation
Answer: C. Reason to know satisfies that part of the stated notice trigger
Rule 1450.830 uses knows or has reason to know. The same-agent, client, same-property and concurrent-consideration facts must also be present.
9. After the required competing-client notice, an affected client requests referral to another designated agent. What does the rule require?
- Automatically cancel every offer
- Disclose the other client's maximum price instead
- Ignore the request because notice ended the duty
- Make the required referral
Show answer and explanation
Answer: D. Make the required referral
The adopted rule requires referral upon the clients' request. Notice does not itself authorize sharing confidential terms or force automatic cancellation.
10. The client's price ceiling is confidential on the supplied facts. No permission or other lawful exception applies. Does competing-client notice authorize revealing it?
- Yes, if disclosure might raise bidding
- No, the separate confidentiality duty remains
- Yes, every notice releases all terms
- Yes, if the other buyer uses the same app
Show answer and explanation
Answer: B. No, the separate confidentiality duty remains
The written disclosure identifies the competing-client situation; it does not release a protected bargaining limit.
11. A properly formed backup agreement imposes present notice obligations and makes primary priority contingent on the first contract ending. Which statement fits?
- The primary contract is automatically displaced
- Present obligations and contingent priority can coexist
- Nothing in a backup can bind before activation
- The buyer always has an unstated free withdrawal right
Show answer and explanation
Answer: B. Present obligations and contingent priority can coexist
Apply the actual promises, conditions and termination terms. Backup status does not itself mean no contract or no present obligations.
12. A signs at Monday 10:00 a.m. and first receives the true copy Tuesday 10:30 a.m. B signed Tuesday 10:00 a.m. Under Rule 1450.775(c), does B's signature restart A's clock?
- Yes; every delivery clock starts at closing
- No; the supplied delivery is 24 hours 30 minutes after A signed
- No copy obligation can arise before closing
- Yes; only the final signature matters
Show answer and explanation
Answer: B. No; the supplied delivery is 24 hours 30 minutes after A signed
The rule requires delivery to the signer within 24 hours after that person's signing or initialing event. This compliance issue does not automatically decide the private contract's validity.
13. Assume a valid contract already exists. A later letter proposes an optional closing-date change, expressly does not condition performance on agreement and does not exercise a termination right. What should not be assumed merely from the proposal?
- A change requires the necessary assent
- The existing contract automatically ended because a change was proposed
- An ambiguous review provision may need separate analysis
- The letter must be read with the existing contract
Show answer and explanation
Answer: B. The existing contract automatically ended because a change was proposed
A proposal to amend an existing agreement is not automatically a rejection of an unaccepted offer or a termination of the existing contract. The scenario expressly supplies optional rather than conditioned performance and no exercised termination right. Patel illustrates why the actual review context and wording matter, not a universal rule for every letter.
Common questions
Must an Illinois seller accept the highest offer?
Not automatically. The client may lawfully evaluate complete terms, including credits, financing, contingencies, dates and performance risks. Existing obligations and applicable nondiscrimination law remain. The listing licensee does not obtain unrestricted authority to choose or accept simply by receiving the offers.
Must every seller give every buyer a best-and-final round?
No automatic rule on this page requires that. A request for improved proposals is not necessarily an offer or a promise of another round. Actual commitments, contract wording, law and duties matter. NAR's guidance describes strategic alternatives; it does not make sellers parties to its professional code.
What does Illinois require about presenting offers?
Section 15-15(a)(2)(B) requires timely presentation to and from the client, with its stated waiver qualification. Section 15-75 separately prescribes minimum services under exclusive brokerage agreements. Read both in their actual scope. Do not assume that an internal review schedule or a broad instruction automatically eliminates a statutory duty.
Do exclusive-agreement services end when the purchase agreement is signed?
Not under that signing-only shortcut. Section 15-75 includes assistance with the specified offers, counteroffers and notices until a lease or purchase agreement is signed and all contingencies are satisfied or waived. It also requires the specified presentation and answering of client questions. That summary is not a blanket ruling on every attempted waiver or agreement. This does not say that every other brokerage duty ends at that point.
Does a counteroffer always look like a new contract form?
No. Read the actual response and communication. Conditional changes can constitute a counteroffer even if a person calls them minor or writes acceptance at the top. Do not confuse that formation question with permission for a licensee to alter a signed document without complying with the written-agreement rule.
Is asking a question the same as making a counteroffer?
Not necessarily. A genuinely unconditioned acceptance, an inquiry and a demand for changed terms are different. The actual words and surrounding contract provisions matter. Patel concerns a proposal under an existing attorney-review provision, so it does not establish that every polite request preserves every open offer or contract.
Does signing an acceptance before the deadline always finish the contract?
No. Check the offer's required communication and effectiveness conditions. The example expressly requires timely receipt, so private signing or sending alone is insufficient. Electronic records and signatures can have legal effect, but attribution, authority, agreed procedures and the applicable formation rules still matter.
Can the seller send counteroffers to several buyers?
The risk depends on the actual documents and acceptance mechanics. Several unconditional proposals capable of acceptance can create incompatible duties. Do not improvise a multi-counter form or treat a heading as protection. Use the sponsoring broker's lawful process and appropriate legal review of the actual terms.
Are competing offer terms always confidential?
No blanket rule makes every submitted term confidential to every recipient. Conversely, the absence of such a blanket rule does not authorize release of a client's protected information. Identify the representation, applicable law, actual confidentiality agreement and lawful authority. Never fabricate an offer or misstate its terms to create urgency.
When does Illinois contemporaneous-offer disclosure apply?
Under Rule 1450.830, offers to purchase or lease concern two or more clients of the same designated agent for the same parcel or unit, and the agent knows or has reason to know the owner or representative will consider them at the same time. Provide the required physical or electronic written disclosure to those clients and refer them to another designated agent upon request. The recipients are the affected clients, not merely the seller, the sponsoring broker or a colleague. Referral upon request is a required step under that rule, not a substitute for giving the notice.
Does every set of offers through the same brokerage trigger that rule?
The same designated agent is part of the stated trigger; same firm alone is not a substitute. The property and concurrent-consideration conditions also matter. Competing clients on the same side are not, by that fact alone, the same situation as representing both sides of a transaction.
How do escalation clauses work?
Apply the actual clause, not a universal shortcut. Check which offer qualifies, what evidence is required, how credits and other terms are compared, the base, increment, cap and acceptance mechanism. The original math examples expressly stipulate a capped formula. Their results do not prove a winning offer or supply a ready-to-use legal clause.
Is a backup offer nonbinding until the first contract ends?
Not necessarily. A backup can become a binding agreement with specified present duties and contingent priority or performance. Read its formation, activation, notice, deposit, deadlines and termination provisions. No automatic free withdrawal right or automatic displacement of the primary agreement is supplied by the label.
What may a licensee change on a signed offer or contract?
Rule 1450.775 requires written consent or direction from all signatories for an addition, deletion or alteration. It separately bars processing an altered signed document unless each change is signed or initialed by all signatories at the time of the change. Planned later filling of signed blanks is also restricted. These duties apply to physical and electronic agreements; a verbal assurance or clean retyping is not a substitute.
When is the signer entitled to a true copy?
Rule 1450.775(c) requires delivery to the person signing or initialing within 24 hours after that original or correction is signed or initialed. Do not restart the earlier signer's clock when another person signs later. Retain the authorized offer chains and material communications under the sponsoring broker's applicable recordkeeping system. A late-copy issue alone does not decide every contract remedy.
Are these official PSI questions or a readiness test?
No. They are original exercises tied to the identified outline and sources. Explain the controlling fact and the difference between the nearest alternatives, then use fresh mixed practice. This short set has no validated passing or booking threshold.
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Official sources and scope
Illinois statutes and adopted rules supply the state duties. NAR's January 1, 2026 guidance describes member practice and client strategy; it is not a statute binding every seller. Finnin concerns contract acceptance in a stock transaction, while Patel concerns a proposal under an existing review provision; neither supplies a universal answer for an ambiguous private letter. Electronic recognition, attribution and receipt remain distinct from substantive formation and authority. All offer amounts, timelines and questions are original teaching scenarios.
- 225 ILCS 454/1-10: client, customer and confidential information
- 225 ILCS 454/15-15: client duties
- 225 ILCS 454/15-25: customer protections
- 68 Ill. Adm. Code 1450.800: confidentiality safeguards
- 775 ILCS 5/3-102: covered conduct, advertising and discriminatory effects
- 68 Ill. Adm. Code 1450.830: defined contemporaneous offers
- Illinois written-agreement rule
- Illinois recordkeeping rule
- Finnin v. Bob Lindsay: strict acceptance despite changes called minor
- Patel v. McGrath: tentative requests and an existing review clause
- 740 ILCS 80/2: land agreements and required signed evidence
- 815 ILCS 333/5, 7 and 9: electronic agreement, recognition and attribution
- 815 ILCS 333/15: electronic sending and receipt
- 225 ILCS 454/15-75: exclusive-agreement minimum services
- NAR 2026 multiple-offer guidance: client decisions and limits of disclosure assumptions
- PSI June 24, 2026: National V.C multiple offers and counteroffers
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.