Counter Offer Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Counter Offer, written in plain English, along with examples of how it is used.

What is Counter Offer?

An offer made in response to an original offer which some changes in the offer thereby terminating the original offer unless it is mentioned in the counter offer that the original offer will not be termninated. Eg – A offer to sell its TV at $ 200, to B. B counter offers the price with $ 150 thereby rejecting the previous original offer of $200 by A.

History and Meaning of Counter Offer

A counter offer is a response to an original offer, which modifies some of its terms and conditions. The counter offer annuls the initial proposal unless it is mentioned that the original offer will remain open. The purpose of counter offer is to identify and negotiate a mutually acceptable arrangement between the parties.

Counter offers have been an acceptable practice in the legal realm for centuries. The initial “offer and counter offer” concept can be traced back to the Roman law system. These laws eventually found their way into English common law and have since been adopted by many other countries as a standard practice in contract law.

Examples of Counter Offer

  1. A seller asks for $10,000 for a car, and a buyer responds with a counter offer of $8,000.
  2. An employee receives an offer of employment for $50,000 a year with no benefits, but requests a counter offer for $60,000 with benefits.
  3. A tenant proposes a lease agreement for a two-year term, but the landlord submits a counterproposal with a three-year leasing term.
  4. A construction firm submits an initial bid for a project, but after negotiations, submits a counter proposal increasing the bid amount.

Legal Terms Similar to Counter Offer

  1. Offer: A promise given by one party to another party to undertake a specific action or pay something of value.
  2. Acceptance: It is the assent to an offer which ultimately creates the agreement between parties.
  3. Rejection: The refusal of an offer that brings it to an end without any future liability.
  4. Breach of Contract: A violation of the terms and conditions agreed upon in a contract.
  5. Option Contract: An agreement where one party pays another to keep an offer open for a specified time.