An offer to purchase real estate is terminated by all of the following EXCEPT:
Audio Lesson
Duration: 2:45
Question & Answer
Review the question and all answer choices
Death of the offeror
Death of the offeror terminates an offer because agency and contract law hold that an offer is a personal privilege that cannot survive the offeror's death — there is no longer a legal person capable of being bound by the contract if the offeree attempts to accept.
Counteroffer by the offeree
A counteroffer terminates the original offer under the mirror image rule, because the offeree's proposal of different terms constitutes both a rejection of the original offer and a new offer, extinguishing the offeree's power to accept the original terms.
Inquiry about terms by the offeree
Rejection by the offeree
An explicit rejection by the offeree terminates the offer because once the offeree communicates an unwillingness to accept the terms, the offeror is entitled to rely on that rejection and act accordingly — allowing the offeree to later accept after rejecting would create unacceptable uncertainty for offerors.
Why is this correct?
An inquiry about terms — such as asking 'Would you consider a lower price?' or 'Is the closing date flexible?' — does not constitute a rejection or counteroffer and therefore does not terminate the original offer, leaving it open for acceptance. This principle, recognized in contract law cases including Stevenson, Jacques & Co. v. McLean (1880), distinguishes between a mere request for information and a definitive rejection or new proposal. Because the inquiry does not manifest an intent to reject the offer or propose different terms, the offeree retains the power to accept the original offer even after making the inquiry.
Deep Analysis
AI-powered in-depth explanation of this concept
Offer termination rules exist to create legal certainty about when parties are bound by contractual obligations and when they remain free to walk away, preventing parties from being held to agreements they no longer wish to make. The Restatement (Second) of Contracts and the Uniform Commercial Code both recognize that an offer creates a power of acceptance in the offeree, but that power can be extinguished by specific events before acceptance occurs. The distinction between a counteroffer (which terminates the original offer) and a mere inquiry (which does not) is legally significant because it determines whether the original offer can still be accepted — a nuance that prevents offerees from losing their options simply by asking questions. This rule encourages negotiation and communication without penalizing parties for seeking clarification before making binding decisions.
Knowledge Background
Essential context and foundational knowledge
The rules governing offer termination developed through centuries of English common law contract doctrine and were significantly clarified by 19th-century case law as commercial transactions became more complex and frequent. The landmark English case Stevenson, Jacques & Co. v. McLean (1880) established the critical distinction between a counteroffer and a mere inquiry, holding that asking about terms does not terminate an offer. American courts adopted this principle broadly, and it is now a foundational element of contracts courses in law schools and real estate licensing curricula nationwide. The Restatement (Second) of Contracts § 36 codifies the various methods by which an offeree's power of acceptance can be terminated, providing a comprehensive framework that state courts consistently apply.
Podcast Transcript
Full conversation between instructor and student
Instructor
Hey there! Ready to dive into today's question? It's all about contracts in real estate, specifically what terminates an offer to purchase real estate.
Student
Oh, that sounds interesting! What's the question?
Instructor
Great question! Here it is: "An offer to purchase real estate is terminated by all of the following EXCEPT:" Then, we have the options: A. Death of the offeror, B. Counteroffer by the offeree, C. Inquiry about terms by the offeree, and D. Rejection by the offeree.
Student
Okay, so we're looking for the one that doesn't terminate the offer. Got it.
Instructor
Exactly! This question tests your understanding of when an offer is no longer valid. It's important to know because it determines when a contract is formed and when parties are no longer obligated.
Student
Right, so what's the correct answer and why?
Instructor
The correct answer is C. Inquiry about terms by the offeree. This is because an inquiry shows interest but doesn't reject the offer. It's like asking for menu options at a restaurant – your reservation still stands.
Student
Got it. So, what about the other options?
Instructor
Well, let's go through them. Option A, the death of the offeror, terminates the offer because the offeror can't perform their obligations after death. Option B, a counteroffer, terminates the original offer because it's a new proposal. And option D, a rejection, is straightforward – it definitively communicates unwillingness to accept.
Student
Those make sense. But why do students often pick the wrong answers?
Instructor
Good point. Students sometimes confuse inquiries with rejections. They might think that asking for more information is a rejection, but it's not. It's just a request for clarity. And sometimes they forget that death and counteroffers are clear terminators.
Student
That's helpful to know. What's a memory technique for this?
Instructor
I like to use an analogy. Think of an offer like a restaurant reservation. If you call to ask about menu options (inquiry), your reservation still stands. If you ask to change the time or order something different (counteroffer), the original reservation is canceled. If you say you're not coming (rejection), your reservation is gone. And if the restaurant closes permanently (death of offeror), your reservation is terminated.
Student
That's a great way to visualize it! Thanks for breaking it down for me.
Instructor
You're welcome! Remember, only actions showing clear intent to reject or change the offer will terminate it. And always keep inquiries separate from rejections. Good luck with your studies, and keep those questions coming!
Remember the acronym D-C-R kills offers: Death, Counteroffer, Rejection — these three events terminate an offer like three bullets. An Inquiry, by contrast, is just a question mark — it doesn't pull the trigger. Visualize an offeree holding the original offer document: if they ask a question, they're still holding it intact; only if they cross it out (reject), rewrite it (counteroffer), or the offeror dies does the document burst into flames. The question mark (?) = offer survives; the X (reject/counter) = offer dies.
When encountering offer termination questions, mentally map the situation to the restaurant reservation analogy to determine if the action preserves or terminates the offer.
Questions asking what does NOT terminate an offer are testing whether you know the inquiry exception — always look for the answer that involves asking a question or seeking clarification rather than proposing new terms or explicitly refusing. The phrase 'EXCEPT' in the question stem is a signal to find the one item that does not belong in the category, so mentally verify each option against the rule: death terminates, counteroffer terminates, rejection terminates, but inquiry does not. If you see an answer involving a question or request for information, that is almost certainly the 'EXCEPT' answer in offer termination questions.
Real World Application
How this concept applies in actual real estate practice
A buyer submits a written offer of $425,000 on a Seattle condominium with a 72-hour acceptance window. The next day, the buyer's agent calls the listing agent and asks, 'Would the seller consider including the parking space in the sale price?' The listing agent responds that the seller wants to think about it. The following morning, the buyer decides to accept the original offer as written and submits a signed acceptance. Because the inquiry about the parking space was merely exploratory and not a counteroffer or rejection, the original offer was never terminated, and a valid contract is formed at $425,000 without the parking space — illustrating how an inquiry preserves rather than destroys the buyer's options.
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