A seller in Milwaukee receives an offer for $310,000 but counters at $325,000 in writing. The buyer then submits a new written offer at $318,000. Under Wisconsin contract law, what is the legal effect of the buyer's $318,000 submission?
Correct Answer
B) It is a rejection of the $325,000 counteroffer and a new counteroffer at $318,000
Under Wisconsin contract law, a counteroffer is both a rejection of the prior offer and a new offer. When the buyer submits a $318,000 figure in response to the seller's $325,000 counteroffer, the buyer is rejecting the seller's counteroffer and presenting a new offer at $318,000. The seller's $325,000 counteroffer is now terminated and cannot be accepted by the buyer.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
An option contract gives one party the exclusive right, but not the obligation, to purchase or lease a property at a specified price within a specified time period. The buyer pays option consideration to keep the option open.
A purchase agreement is a legally binding contract between a buyer and seller that outlines the terms and conditions for the sale of real property. It is also commonly called a sales contract, purchase and sale agreement, or earnest money agreement.
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