Legal Definitions - counter offer

A counter offer is a new proposal made in response to an initial offer during negotiations for a contract. When a party makes a counter offer, they are essentially rejecting the original offer and proposing different terms or conditions. This act of making a counter offer automatically terminates the original offer, meaning it can no longer be accepted. The party who made the initial offer then has the choice to accept the new counter offer, reject it, or make their own counter offer in return.

• Example 1: Business Equipment Purchase

  Imagine a small business, "Tech Solutions," wants to buy a new server from a supplier. The supplier sends an offer to Tech Solutions for a specific server model at a price of $10,000, with a delivery time of four weeks. Tech Solutions reviews the offer and responds, saying, "We'll purchase that server for $9,500, provided it can be delivered within two weeks."

  Explanation: Tech Solutions' response is a counter offer. By proposing a lower price and a shorter delivery time, they have changed the terms of the original offer. The supplier's initial offer of $10,000 with a four-week delivery is now legally void and cannot be accepted by Tech Solutions. The supplier must now decide whether to accept Tech Solutions' new terms, reject them, or make another counter offer.

• Example 2: Residential Lease Agreement

  A landlord offers to rent an apartment to a prospective tenant for $1,800 per month on a one-year lease, with the tenant responsible for all utilities. The tenant replies, "I'm interested in the apartment, but I would like to pay $1,700 per month for a two-year lease, and I'd like water included in the rent."

  Explanation: The tenant has made a counter offer. Their proposal alters the monthly rent, the lease duration, and the utility responsibilities from the landlord's original terms. As a result, the landlord's initial offer of $1,800 for a one-year lease with all utilities paid by the tenant is no longer valid. The landlord must now consider the tenant's new terms.

• Example 3: Freelance Project Contract

  A marketing agency offers a freelance graphic designer a contract to create a new company logo for a flat fee of $2,500, with a deadline of three weeks. The graphic designer responds, "I can complete the logo design for $3,000, and I will need four weeks to ensure the highest quality work."

  Explanation: The graphic designer's response is a counter offer. They have changed both the proposed fee and the project timeline from the marketing agency's original offer. The agency's initial offer of $2,500 with a three-week deadline is now rejected and cannot be accepted by the designer. The marketing agency must now decide how to proceed with the designer's new proposal.