An associate broker in Las Cruces presents a written offer from a buyer to the seller. The seller makes a counteroffer by changing the closing date and initialing the change. The buyer's associate broker receives the counteroffer but the buyer has not yet responded. At this point, which of the following best describes the legal status of the original offer?
Correct Answer
B) The original offer is terminated because the seller's counteroffer constitutes a rejection and a new offer
Under basic contract law as applied in New Mexico purchase agreements, a counteroffer constitutes both a rejection of the original offer and the creation of a new offer. Once the seller made a counteroffer, the original offer was legally terminated. The buyer is now the offeree of the new counteroffer and may accept, reject, or counter it, but cannot revert to the terms of the original offer without the seller's renewed agreement.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
An assignment of contract transfers one party's rights and obligations under a contract to a third party called the assignee. The original party, known as the assignor, transfers their contractual position to someone who was not originally part of the agreement.
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