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A counteroffer functions as both a rejection of an offer to enter into a contract, as well as a new offer that materially changes the terms of the original offer. Because a counteroffer serves as a rejection, it completely voids the original offer. Thus, the original offer can no longer be accepted.

However, note that added modifications do not necessarily mean that a party made a counteroffer. Instead, these added modifications may create a conditional acceptance, depending on the changed terms and the applicable law. Alternatively, requests for modifications may not constitute a new offer at all but may instead be mere negotiation.

Related terms:

  • Contracts
  • Consideration
  • Offer and acceptance

[Last updated in August of 2022 by the Wex Definitions Team