Contracts

Contracts — Agency & Contracts > Why this matters on the exam: Contracts questions make up roughly 8% of the IL broker exam (~11 questions), and they pair tightly with agency law for a combined ~20% of your score. Mastering the essentials here — especially Illinois-specific rules like SB 3740 and the attorney review period — can make a decisive difference on exam day. --- ## The Five Essential Elements of a Valid Contract Every enforceable real estate contract must contain all five of the following elements. If any one is missing, the contract may be void or voidable. | Element | Plain-English Meaning | |---|---| | Offer and Acceptance (Mutual Assent) | Both parties agree to the same terms — a "meeting of the minds" | | Consideration | Something of value exchanged (money, a promise, services) | | Legally Competent Parties | Both parties must be of legal age and mental capacity | | Lawful Purpose | The contract cannot be for an illegal act | | In Writing (Statute of Frauds) | Real estate contracts must be in writing to be enforceable | The Statute of Frauds is critical in Illinois: any contract for the sale or transfer of real property, or any agreement lasting more than one year, must be in writing and signed to be enforceable in court. --- ## Contract Status: Valid, Void, Voidable, Unenforceable | Status | What It Means | |---|---| | Valid | All elements present; fully enforceable | | Void | No legal effect at all (e.g., illegal purpose, no consideration) | | Voidable | One party has the right to cancel (e.g., a minor signed it; signed under…