California First-Year Law Students' Exam (Baby Bar) — MCContractsEasy
A homeowner offers to sell their vintage car, a 1965 Ford Mustang, to a collector for $75,000. The collector responds, 'I'll take it, but only if you include the original factory repair manual.' Which of the following statements best describes the legal effect of the collector's response?
- AThe collector's response is a mere inquiry, leaving the original offer open.
- BThe collector's response is a counteroffer, terminating the original offer.
- CThe collector's response is an acceptance, but the inclusion of the manual is a condition subsequent.
- DThe collector's response is an acceptance, forming a valid contract.
Show answer & explanationAnswer & explanation
Correct answer: B. The collector's response is a counteroffer, terminating the original offer.
A response that purports to accept an offer but introduces new terms constitutes a counteroffer. A counteroffer rejects the original offer and creates a new offer.
Why the other options are wrong
- A. This is incorrect; the language 'I'll take it, but only if...' clearly indicates a conditional assent, not a mere request for information.
- C. This is incorrect; the condition is precedent to the formation of the contract, not subsequent to it, and it's fundamentally a counteroffer.
- D. This is incorrect because adding a new term (the repair manual) prevents it from being a mirror-image acceptance.
Counteroffer
A response to an offer that changes the terms of the original offer, thereby rejecting the original offer and creating a new offer.
- Rejects the original offer.
- Creates a new offer.
- Original offeror becomes the offeree.
Memory trick: An offer is a proposal, acceptance is saying 'yes,' but a counteroffer is a 'yes, but…'