What is a counter-offer?

A counter-offer is a specific type of response in a negotiation process that essentially rejects the original offer while simultaneously proposing different terms. This means that when one party presents an offer and the other party does not simply accept it but rather suggests new terms or conditions, that constitutes a counter-offer.

For example, if someone offers to sell a car for a certain price, and the other person responds with a different price or requests additional terms, that response does not accept the original offer but modifies it instead. This is critical because, in the law of contracts, once a counter-offer is made, the original offer is extinguished and cannot be accepted unless it is re-offered.

Understanding that a counter-offer does not accept the original terms but instead seeks to negotiate different terms can clarify its role in contract law and negotiation scenarios. The other options, which suggest acceptance of the original offer or merely a rejection without proposing new terms, do not capture the essence of a counter-offer accurately.