What is the term for a rejection of an offer to buy or sell made with a simultaneous substitute new offer?

What is the term for a rejection of an offer to buy or sell made with a simultaneous substitute new offer?

• A. Acceptance
• B. Offer amendment
• C. Option
• D. Counteroffer

Answer: (D)

When someone responds with a new proposal that changes the terms, that is a counteroffer. It rejects the original offer and replaces it with a fresh offer from the offeree to the offeror. Because a counteroffer is a new proposal, the original offer lapses, and the other party may now accept, reject, or issue another counteroffer. Acceptance would mean agreeing to the exact terms of the original offer, not to modified terms. An option creates a separate right to buy or sell, and an offer amendment would adjust terms within the existing offer—neither describes presenting a substituted new offer the way a counteroffer does.

When someone responds with a new proposal that changes the terms, that is a counteroffer. It rejects the original offer and replaces it with a fresh offer from the offeree to the offeror. Because a counteroffer is a new proposal, the original offer lapses, and the other party may now accept, reject, or issue another counteroffer. Acceptance would mean agreeing to the exact terms of the original offer, not to modified terms. An option creates a separate right to buy or sell, and an offer amendment would adjust terms within the existing offer—neither describes presenting a substituted new offer the way a counteroffer does.