A seller in NH responds to a buyer's purchase offer by changing the proposed price. What is the legal effect of this counteroffer?
Correct Answer
B) Rejects the original offer and creates a new offer that the buyer may accept or reject
Under general contract law principles applied in NH, a counteroffer operates as a rejection of the original offer and simultaneously creates a new offer on the modified terms. Once a counteroffer is made, the original offer is extinguished and the original offeror is no longer bound by it. The party who received the counteroffer may then accept, reject, or counter again. Real estate contracts in NH must be in writing to be enforceable under the Statute of Frauds.
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Related Topics & Key Terms
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Related Concepts
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
An assignment of contract transfers one party's rights and obligations under a contract to a third party called the assignee. The original party, known as the assignor, transfers their contractual position to someone who was not originally part of the agreement.
A bilateral contract is an agreement in which both parties exchange promises and are both obligated to perform, while a unilateral contract is one in which only one party makes a promise and the other party is not obligated to act.
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