Sarah submits a written offer to purchase a home in Wichita for $285,000. The seller, Tom, crosses out the price and writes in $295,000, then signs and returns the document to Sarah. Under Kansas law, what has Tom created?
Correct Answer
B) A counteroffer that terminates Sarah's original offer
Under Kansas contract law, when a party changes any material term of an offer — such as the purchase price — and returns it, this constitutes a counteroffer. A counteroffer simultaneously rejects the original offer and proposes new terms. Sarah's original offer at $285,000 is legally terminated, and Tom's counteroffer at $295,000 becomes the new offer that Sarah may accept or reject.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Liquidated damages are a predetermined amount of money specified in the contract that the non-breaching party is entitled to receive if the other party breaches. In real estate, the earnest money deposit typically serves as liquidated damages.
Novation is the substitution of a new contract for an existing one, or the replacement of one party with a new party, with the consent of all parties involved. The original party is completely released from all obligations.
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.
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