Contracts and Transaction Documents
Formation and the paper trail
A valid contract needs offer, acceptance, consideration, capacity, legality, and mutual assent. Real estate contracts must satisfy the statute of frauds - a writing signed by the party to be bound, with essential terms (parties, property, price, signatures). Illinois recognizes electronic signatures, so an emailed or e-signed acceptance can satisfy the writing requirement.
Counteroffers and contingencies. An acceptance that changes any term is a counteroffer and kills the original offer; a counteroffer must itself be accepted. Contingencies (financing, inspection, appraisal, sale of the buyer's home, attorney review) are conditions that let a party exit without breach - read carefully what triggers them and what deadlines apply. On the widely used Multi-Board residential contract, buyers and sellers typically have a short attorney-review window (commonly five business days) to disapprove the contract in writing.
Illinois disclosures. The Residential Real Property Disclosure Report must be delivered before the buyer signs; if the seller delivers it late, the buyer generally may terminate within three business days after receiving it. Federal lead-based paint disclosure applies to pre-1978 housing, and Illinois requires a radon disclosure.
Money and remedies. Earnest money is held in a trust or escrow account and, on dispute, is often interpleaded. Remedies include specific performance for the seller and liquidated damages or return of earnest money for the buyer, depending on the contract language.
Trap: silence is not acceptance, and an offer terminated by counteroffer cannot later be 'revived' by the original offeree's acceptance.
Rule of thumb: every modification of a real estate contract must be in writing and signed - the statute of frauds does not relax just because the parties are friendly.