White Paper · Real Estate · Chicago

The Attorney-Review Period in Chicago-Area Contracts

Five business days, a short clause, and a line of Illinois decisions that do not always agree. How attorney review works, and how to use it without creating the dispute it is meant to prevent.

By Lincoln Square Law · 10-minute read

Most buyers and sellers in the Chicago area meet the attorney-review clause as a line item on a checklist: five business days, get a lawyer, send a letter. Lawyers who handle residential closings know it as something more complicated. The clause decides when a contract becomes binding, it determines whether a letter proposing changes keeps the deal alive or ends it, and it has produced a line of Illinois appellate decisions that do not all point the same way. This paper explains where the clause comes from, how Illinois courts have read it, and how to use it without creating the dispute it is meant to prevent.

Why Chicago contracts have an attorney-review clause

The clause exists because of a line Illinois drew between brokerage and the practice of law. In Chicago Bar Association v. Quinlan & Tyson, Inc., 34 Ill. 2d 116 (1966), the Illinois Supreme Court held that real estate brokers may fill in the blanks on the standard form contracts customarily used in the community, but may not draft or modify contract terms in ways that amount to practicing law. The result is a two-step transaction. The brokers put the deal on a standard form quickly, and the attorneys then get a short, defined period to review the form and adjust the legal terms.

The Chicago-area Multi-Board residential contract builds that second step into the document. Under the form, the parties’ attorneys may review the contract for a set number of business days after acceptance, commonly five, and may propose written modifications. If the parties do not agree on the proposed modifications within the period, either party may terminate by written notice and the earnest money is returned to the buyer. If no notice is served before the period ends, the attorney-review provision is waived and the contract stands as written. Form versions change over time, and the precise wording of the version the parties actually signed controls every question discussed below.

Two readings of the same clause

The practical question that has divided Illinois courts is simple to state. When an attorney sends a letter proposing modifications, is the original contract still in place while the parties negotiate, or has the letter rejected it?

One line of cases treats proposed modifications as counteroffers. In Olympic Restaurant Corp. v. Bank of Wheaton, 251 Ill. App. 3d 594 (2d Dist. 1993), letters between the attorneys proposing changes were held to be counteroffers that operated as rejections, and because the parties never reached agreement on the new terms, no binding contract existed. Under this reading, the attorney-review clause makes the contract conditional, and a proposal to change it reopens the negotiation from the beginning.

A later line of decisions reads the clause differently. In Patel v. McGrath, 374 Ill. App. 3d 378 (2d Dist. 2007), the buyer’s attorney expressly stated that the proposed modifications should not be construed as a counteroffer, and the court treated the attorney-review clause as a condition subsequent. The original contract remained in force, and when the modifications were not accepted, the question became whether a proper termination notice had been given, not whether a contract had ever existed.

The difference is not academic. Under the counteroffer reading, a seller who receives a better offer the day after a buyer’s attorney sends a modification letter may argue that the first deal is already gone. Under the condition-subsequent reading, the first contract stays alive until someone terminates it in the way the contract requires. Current forms are drafted with these cases in mind, but the language in the signed form and the words used in each attorney letter still determine which reading a court is likely to apply.

Disapproval does not require a reason

Illinois courts have consistently held that an attorney may disapprove a contract under an attorney-review or attorney-approval clause without explaining why. In Groshek v. Frainey, 274 Ill. App. 3d 566 (1st Dist. 1995), the appellate court held that an attorney approval provision allows disapproval without a stated reason. Denis F. McKenna Co. v. Smith, 302 Ill. App. 3d 28 (1st Dist. 1998), reached a similar result and rejected the argument that disapproval without a detailed explanation amounted to bad faith.

That rule gives both sides real flexibility during the review period. A buyer who learns something unsettling about the building, or a seller who concludes that the buyer’s financing is too thin, can end the deal within the period without litigating whether the reason was good enough. The flexibility ends when the period ends.

When the period expires

Once the review period passes without a timely disapproval or termination notice, the contract becomes final on its written terms. In Hubble v. O’Connor, 291 Ill. App. 3d 974 (1st Dist. 1997), the court held that the contract became binding when the approval period expired without notice of disapproval, and that discussions about possible modifications during the period did not by themselves amount to a demand for modification or a rejection of the contract.

Two consequences follow. First, informal conversations between agents or attorneys do not preserve anything. Only a written notice delivered in the way the contract specifies does. Second, a party who lets the period expire while negotiations continue has, in most cases, agreed to the contract as signed. Any later changes are ordinary amendments that require both sides’ agreement, and neither side can walk away simply because the talks broke down.

Counting and delivering

Many attorney-review disputes turn on arithmetic rather than doctrine. The contract defines when the period starts, usually the date of acceptance, and whether days are business days. It also specifies how notices must be delivered and to whom. Modern forms generally permit delivery by email to the addresses listed in the contract, but the form controls, and a notice sent to the wrong address or by an unauthorized method can be ineffective even if it was sent on time.

A careful practitioner records the acceptance date, confirms which days count, identifies the last day and the time by which notice should be served, and confirms delivery in writing. When there is any doubt about the deadline, the safer course is to serve notice a day early or obtain a written extension signed by both attorneys.

How the clause interacts with the other contingencies

Attorney review is often confused with the inspection contingency because the two run at the same time. They are separate rights. The inspection provision allows the buyer to raise defects revealed by a professional inspection, and it has its own deadline and its own termination mechanics. The mortgage contingency has another. Attorney review is broader than either one, because it allows any term to be revisited, but it is also shorter.

The overlap creates both opportunities and risks. A buyer’s attorney often raises inspection issues through the attorney-review letter, because that letter can address any term. But if attorney review ends and the parties are still negotiating repairs, the buyer’s remaining protection may be only the narrower inspection right, subject to its own conditions. Keeping the deadlines separate on the calendar prevents a buyer from assuming that one right protects the other.

Seller disclosures add one more clock. The Residential Real Property Disclosure Act requires the seller to deliver the disclosure report before the contract is signed (765 ILCS 77/20). If the report is delivered after signing and discloses a material defect, the buyer may terminate within five business days after receipt (765 ILCS 77/40). That statutory right runs independently of attorney review, and it can outlast it.

Condominiums and the association package

For a condominium, attorney review is often the only practical window for acting on the association documents. The Condominium Property Act requires specified documents and information to be made available to a prospective purchaser on resale, including the declaration, bylaws, rules, budget and financial information, reserve status, pending litigation, and any right of first refusal (765 ILCS 605/22.1). If those materials arrive late, the buyer’s attorney should consider requesting a written extension of attorney review or adding an express contingency tied to review of the documents.

Earnest money when the deal ends

When a contract is terminated during attorney review, the earnest money is ordinarily returned to the buyer. In practice, escrowees usually release funds only on joint written direction or as the contract otherwise provides, so a clean termination includes a signed cancellation that directs the escrowee to return the deposit. Where one side disputes whether termination was proper, the money can remain in escrow until the parties agree or a court decides. A timely, correctly delivered notice is the best protection against that outcome.

Practice recommendations

For buyers and sellers, and for the lawyers who represent them, the case law points to a few habits:

• Engage counsel before the offer is accepted. The period is short, and a day spent finding a lawyer is a day not spent reviewing the deal.
• Calendar the deadline in writing. Record the acceptance date, the method of counting, and the last day to serve notice.
• Say what a modification letter is and is not. State expressly whether proposed modifications are intended as a counteroffer, and whether the original contract remains in effect while they are negotiated.
• Use the contract’s notice method. Deliver notices to the addresses and by the means the contract allows, and keep proof of delivery.
• Put extensions in writing. A verbal agreement to take a few more days does not change a written deadline.
• Close the loop. If the deal ends, sign a cancellation directing return of the earnest money.

What Illinois courts agree on and where they differ

The attorney-review clause is short, but it carries a surprising amount of law. Illinois courts agree that an attorney may disapprove without giving reasons and that the contract becomes final when the period expires. They have differed on whether a modification letter keeps the original contract alive. Parties who understand those rules can use the review period for what it is meant to do: give each side a lawyer’s judgment before the deal becomes binding.