Which statement about counteroffers is correct?

• A. A counteroffer extends the offer
• B. It requires acceptance of the original offer
• C. A counteroffer terminates the original offer
• D. A counteroffer has no effect on the original offer

Answer: (C)

A counteroffer terminates the original offer. When you present a counteroffer, you are rejecting the terms of the initial offer and proposing new ones. Once a counteroffer is made, the original offer is no longer on the table, so there isn’t a contract based on those original terms unless the counteroffer themselves is accepted. In real estate negotiations this means the counterproposal replaces the original terms; the other party can accept, reject, or counter again. If the counteroffer isn’t accepted, negotiations may end or a new offer can be made. The other statements don’t fit: a counteroffer doesn’t extend the original terms, acceptance would be of the counteroffer, and the counteroffer does affect the original offer by terminating it.