1. An offer or counteroffer becomes a binding contract when:
Answer & explanation
Answer: A. Acceptance must be unconditional and communicated back to the offeror; any change creates a counteroffer instead.
contracts
counteroffer
A counteroffer is a response to an offer that changes any of its terms, such as the price, closing date, or contingencies. Legally, a counteroffer rejects the original offer and becomes a new offer from the responding party. The original offeror is then free to accept, reject, or counter again. Once a counteroffer is made, the original offer cannot be revived and accepted unless it is offered again.
- Exam tip
- Any change, however small, turns an acceptance into a counteroffer. The original offer is terminated and cannot later be accepted.
- Example
- A buyer offers $300,000; the seller replies agreeing at $310,000. The buyer's original offer is dead, and the seller's $310,000 is now the offer on the table.
Related terms & state variants
Sources
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Last verified: 2026-10-23