In contract law, what is a "counteroffer"?

Question

Accepted Answer

A rejection of the original offer combined with a new offer. A counteroffer is a rejection of the original offer combined with the creation of a new offer on different terms. Under the common law "mirror image rule," an acceptance must exactly match the terms of the offer. If the offeree responds with different or additional terms, this constitutes a counteroffer rather than an acceptance. The counteroffer terminates the original offer, and the original offeror is no longer bound by it. The original offeror now becomes the offeree with the power to accept or reject the counteroffer.

An acceptance with additional thanks would still be a valid acceptance if no new or different terms are introduced - merely expressing gratitude does not change the nature of an acceptance. A request for more information about the offer is an inquiry rather than a counteroffer - asking questions does not reject the offer or create a new one, and the original offer remains open. A confirmation of the original offer's terms is essentially an acceptance, not a counteroffer - restating the same terms while agreeing to them creates a binding contract.

Offer and acceptance rules are fundamental contract law concepts tested extensively on the CLEP exam. Students should understand how offers are created, communicated, and terminated, the mirror image rule for common law contracts, the different rules under the UCC for sales of goods, and the legal effect of counteroffers on the original offer.

CLEP Introductory Business Law: Question of the Day

Get a free CLEP Introductory Business Law question every day

Ready for the full CLEP Introductory Business Law? Earn 3 college credits.