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. This means that the original offer can no longer be accepted.
However, 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.
[Last updated in November of 2020 by the Wex Definitions Team]