Under Massachusetts contract law, which of the following best describes the legal effect of a counteroffer made by a seller in response to a buyer's original offer?
Correct Answer
B) The counteroffer simultaneously rejects the original offer and creates a new offer from the seller
Under general contract principles applied in Massachusetts, a counteroffer operates as both a rejection of the original offer and the creation of a new offer. Once the seller submits a counteroffer, the buyer's original offer is extinguished and cannot be accepted by the seller. The parties' roles reverse: the seller is now the offeror and the buyer is the offeree.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Equitable title is the buyer's interest in a property after a purchase contract is signed but before closing, giving the buyer the right to acquire legal title in the future. The seller retains legal title until the deed is delivered at closing.
A financing contingency makes the purchase contract conditional upon the buyer obtaining mortgage approval within a specified time period. If the buyer cannot secure financing, they can cancel the contract and receive their earnest money back.
An inspection contingency gives the buyer the right to have the property professionally inspected within a specified time frame and to negotiate repairs or cancel the contract based on the findings.
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