Contract Law – Offer And Counter Offer

 An offeree may reject an offer at any time. When they reject the offer, the offer is immediately ended. There are two types of rejection:
  • Express rejection
  • Implied rejection

Express Rejection

This is where the offeree indicates their rejection of the offer by some form of firm action. This may be oral or in writing.

Implied Rejection

If any material (main) terms of the offer are changed then it is considered to be a counter offer.

Counter Offer

A counter-offer is made when the offeree makes a change to the ‘material subject’ of the offer. When a counter offer is made by the offeree the original offer is automatically ended.

Rejection And Counter Offer (Example)

  • Peter (The offeror):
    • “I’ll paint your fence for $500” (This is the original offer)
  • Ann (The offeree):
    • “How about $450?” (The original offer has been rejected and has now ended)
  • Ann now becomes the offeror as she has made a counter offer at a lower price of $450
  • Peter is now the offeree and has the option to accept or reject the revised offer from Ann.
  • Peter accepts Ann’s revised offer:
    • “OK, I’ll start after lunch”.

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Posted in Business Law, Contract Law.