A buyer makes an offer on a property in Cherry Hill, New Jersey for $380,000. The seller responds in writing that she will accept $395,000. Under New Jersey contract law, what is the legal effect of the seller's response?
Correct Answer
B) The seller's response is a counteroffer, which terminates the original offer and creates a new offer from the seller
Under New Jersey contract law, a response that changes any material term of the original offer — such as the purchase price — constitutes a counteroffer, not an acceptance. A counteroffer simultaneously rejects the original offer and creates a new offer from the responding party. The buyer's original offer of $380,000 is terminated and the seller's counteroffer of $395,000 is now open for the buyer to accept or reject.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Specific performance is a court-ordered remedy that compels the breaching party to fulfill their obligations under the contract rather than simply paying monetary damages. It is an equitable remedy used when monetary damages would be inadequate.
The Statute of Frauds is a legal requirement that certain types of contracts must be in writing and signed to be enforceable. In real estate, all contracts for the sale of land or interests in land must be in writing.
A time is of the essence clause in a contract means that all deadlines and dates specified in the agreement are strictly enforceable, and failure to meet them constitutes a material breach.
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