National Real Estate Exam (PSI)ContractsEasy
A seller receives an offer from a buyer at $250,000. The seller signs the offer but changes the closing date and sends it back to the buyer. What is the legal effect of this action?
- AThe change is treated as a minor modification requiring no new acceptance
- BThe buyer must accept the change immediately or the deal is void
- CThe original offer remains binding once the seller signs it
- DThe seller's changes create a counteroffer that terminates the original offer
Show answer & explanationAnswer & explanation
Correct answer: D. The seller's changes create a counteroffer that terminates the original offer
Any change to the terms of an offer constitutes a counteroffer, which rejects and terminates the original offer. The buyer, now the offeree, may accept, reject, or counter the new terms.
Why the other options are wrong
- A. Even a change to a single term is legally a counteroffer, not a minor modification.
- B. There is no requirement for immediate acceptance, though offers can be revoked.
- C. Signing with changes does not create acceptance; it changes terms, making it a counteroffer.
Counteroffer
A response to an offer that changes its terms, which rejects the original offer and creates a new offer for the other party to accept or reject.
- A counteroffer terminates the original offer
- Roles reverse: original offeror becomes offeree
- Mirror image rule: acceptance must match offer exactly or it's a counteroffer
Memory trick: Change one word, kill the offer — counteroffer is born.