Under Indiana contract law, when a seller responds to a buyer's offer by changing one of the material terms, such as the purchase price, what is the legal effect of that response?
Correct Answer
B) The original offer is rejected and a new counteroffer is created for the buyer to accept or reject
Under Indiana contract principles governing real estate transactions, a counteroffer constitutes a rejection of the original offer and simultaneously creates a new offer. The original offer is extinguished and the roles reverse — the buyer becomes the offeree who must decide whether to accept, reject, or counter the new terms. This is a fundamental principle applied in Indiana real estate contracts.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
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