A buyer submits an offer to purchase an Illinois property. The seller responds with a counteroffer that changes the purchase price and closing date. Which statement most accurately describes the legal effect of the seller's counteroffer on the buyer's original offer?
Correct Answer
B) The counteroffer rejects the original offer and substitutes a new proposal that requires the buyer's acceptance to form a binding contract.
Under foundational contract law principles applied in Illinois, a counteroffer simultaneously rejects the original offer and introduces a new proposal. Once the seller issues a counteroffer, the buyer's original offer is extinguished and can no longer be accepted by the seller. The counteroffer itself then becomes the operative proposal, and a binding contract is formed only if the buyer accepts its terms without further modification.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Offer and acceptance is the process by which one party proposes specific terms for a contract and the other party agrees to those exact terms, creating mutual assent. This mutual agreement, also called a meeting of the minds, is an essential element of every valid contract.
An option contract gives one party the exclusive right, but not the obligation, to purchase or lease a property at a specified price within a specified time period. The buyer pays option consideration to keep the option open.
A purchase agreement is a legally binding contract between a buyer and seller that outlines the terms and conditions for the sale of real property. It is also commonly called a sales contract, purchase and sale agreement, or earnest money agreement.
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