subject: Counter Offers - What Are They? [print this page] For a contract to exist there must be an offer and there must be an acceptance of that offer. These are the fundamental principles of contract law.
Once the offer has been made, and provided that there was an intention to create legal relations and valuable consideration was given on the contract, then as long as that offer is accepted in a reasonable timeframe than a contract will be made.
What is a reasonable timeframe? Well in the absence of the party stating otherwise (e.g. you have two days to accept my offer) then the courts will determine what is reasonable. For example if A offers B the chance to purchase A's car for $10,000 and B says he will think about then B cannot turn up six months later and say to A "I accept your offer sell me your car please".
This offer would have terminated in the passage of time should A not wish to sell his car any more for $10,000.
It is important to note that A has the opportunity at any time after making the offer to withdraw it provided that B has not already accepted.
The only time this rule would not apply is when A has contractually said that the offer should remain available for acceptance for a certain time period before it can be withdrawn (e.g. I will give you three days to decide before I withdraw my offer).
A counter offer is simply a rejection of the original offer by the other party with another offer being made. For example A offers to sell to B his dining room table and chairs for $500. B says that's too high and he will pay $450. By making the $450 offer B has made a counter offer and has therefore rejected A's original $500 offer. If A say's no to B's counter offer of $450 then B cannot then turn around and say okay I will buy the table and chairs $500. If A no longer wanted to sell table and chairs to B at that price he no longer had to. He is not bound by the original $500 offer.
