What is the legal significance of a counteroffer?

A counteroffer is a response to an original offer in which the offeree proposes different terms than those offered in the original agreement. The legal significance of a counteroffer is that it effectively nullifies the original offer. This means that once a counteroffer is made, the original offer is no longer valid, and the parties cannot revert to the initial terms without the consent of both parties.

When a counteroffer is presented, it signifies a rejection of the original offer and introduces new terms that the original offeror must accept in order for a contract to be formed. This is an essential aspect of contract law, as it underscores the idea that for an agreement to be binding, both parties must mutually consent to the same terms.

While options related to negotiation and extending deadlines for acceptance may seem relevant, they do not capture the primary legal effect of a counteroffer, which is the termination of the original offer. The possibility for negotiation is inherent in the process of making a counteroffer, but it does not characterize its legal significance.