Counteroffer: The Art of Negotiation in Contract Law

What is Estevan's response considered in the scenario?

A. A conditional acceptance

B. A unilateral contract

C. An acceptance

D. An invitation to negotiate

E. A counteroffer

Estevan's response is considered a counteroffer.

When Belinda sent an email offering to sell her entertainment system to Estevan for $2,500, it was an initial offer or proposal, also known as the "offeror." However, Estevan's response stating that the price seemed a bit high and offering to buy the entertainment system for $2,000 is considered a counteroffer. A counteroffer is a response to an initial offer that proposes different terms than those in the original offer, essentially rejecting the original offer and making a new offer in return.

By making a counteroffer, Estevan becomes the "offeree" since he is now the one making an offer. At this point, Belinda has the option to either accept Estevan's counteroffer, reject it, or make another counteroffer in response. Until one party accepts the terms proposed by the other party, no legally binding agreement is formed.

A counteroffer is an important concept in contract law as it demonstrates the process of negotiation between parties. Each counteroffer creates a new proposal, and the roles of offeror and offeree can switch back and forth until both parties reach a mutual agreement or decide not to proceed with the negotiation. It's essential to be clear about the distinction between counteroffers and acceptances in contract negotiations to understand the legal implications and responsibilities of each party involved.