New York Real Estate Salesperson ExaminationContractsMedium
A buyer makes an offer on a property, and the seller responds with a counteroffer changing the closing date. The buyer then rejects the counteroffer. What is the legal status of the seller's initial counteroffer?
- AIt automatically reverts to the original offer.
- BThe seller can sue the buyer for breach of contract.
- CIt is terminated upon rejection by the buyer.
- DIt is still open for acceptance by the buyer.
Show answer & explanationAnswer & explanation
Correct answer: C. It is terminated upon rejection by the buyer.
A counteroffer is a new offer, and like any other offer, it is terminated if the offeree (in this case, the original buyer) rejects it. Once rejected, it cannot be subsequently accepted.
Why the other options are wrong
- A. A counteroffer terminates the original offer; it does not revert to it.
- B. There is no contract formed, so there can be no breach of contract claim.
- D. Rejection terminates an offer; it does not remain open.
Rejection of Offer
The express refusal by the offeree to accept an offer, which immediately terminates the offer.
- Must be communicated to the offeror.
- Terminates the offer's legal power of acceptance.
- Cannot be later accepted by the offeree.
Memory trick: An offer's life ends fast if it's taken back.