If a party makes a counteroffer, what happens to the original offer and can it be accepted later?

If a party makes a counteroffer, what happens to the original offer and can it be accepted later?

• A. A counteroffer leaves the original offer alive until acceptance.
• B. A counteroffer terminates the original offer but the original terms can be revived by mutual agreement.
• C. A counteroffer terminates the original offer and creates a new offer; the original offeree cannot accept the old terms.
• D. A counteroffer extends the offer period but does not affect acceptance.

Answer: (C)

A counteroffer ends the original offer and simultaneously creates a new offer. When you counter, you’re rejecting the first proposal and proposing different terms; because of that, the original terms no longer exist as an offer the other party can accept. The party who made the counteroffer can accept or reject those new terms, while the offeree who made the counteroffer would need the other side to re-offer or for both sides to reach a new mutual agreement if they want to revisit the old terms. In short, the original offer isn’t alive to be accepted after a counteroffer; acceptance must be of the terms in the new offer created by the counteroffer.

A counteroffer ends the original offer and simultaneously creates a new offer. When you counter, you’re rejecting the first proposal and proposing different terms; because of that, the original terms no longer exist as an offer the other party can accept. The party who made the counteroffer can accept or reject those new terms, while the offeree who made the counteroffer would need the other side to re-offer or for both sides to reach a new mutual agreement if they want to revisit the old terms. In short, the original offer isn’t alive to be accepted after a counteroffer; acceptance must be of the terms in the new offer created by the counteroffer.