A buyer submits an offer to purchase an Illinois residential property. The seller responds with a counteroffer changing the price and closing date. What is the legal effect of the seller's counteroffer on the buyer's original offer?
Correct Answer
C) The counteroffer rejects the original offer and proposes new terms, which the buyer must accept, reject, or counter.
Option C is the correct answer. Under the mirror image rule — a foundational principle of Illinois contract law — a counteroffer operates as a simultaneous rejection of the original offer and the proposal of new terms. The original offer is extinguished and cannot be accepted by the buyer after a counteroffer is issued. The counteroffer itself must then be accepted, rejected, or countered by the buyer to move the negotiation forward. No contract is formed until there is a meeting of the minds on identical terms.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Consideration is something of value exchanged between parties to a contract, making the agreement legally binding. It can be money, a promise to act, a promise to refrain from acting, or anything else of value.
Contingencies are conditions written into a real estate contract that must be met before the transaction can close. If a contingency is not satisfied, the buyer can typically cancel the contract without penalty.
Contract termination occurs when a contract is ended or discharged, releasing both parties from their obligations. A contract can be terminated through performance, mutual agreement, operation of law, or breach.
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