Under Illinois contract law principles applicable to real estate transactions, what is the legal effect of a counteroffer on the original offer?
Correct Answer
C) It rejects the original offer and substitutes new terms that must be accepted by the original offeror to form a contract
Under the mirror-image rule applied in Illinois contract law, a counteroffer simultaneously rejects the original offer and presents a new proposal. The original offer is extinguished and cannot be accepted. A binding contract forms only if the original offeror accepts the counteroffer's 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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