What happens when an initial offer is answered with a counteroffer?

When an initial offer is answered with a counteroffer, the initial offer is considered void. This occurs because a counteroffer represents a rejection of the original offer and presents new terms for consideration. By issuing a counteroffer, the original offeree does not simply modify the terms of the initial offer; rather, they negate the original offer, thus eliminating its legal standing. The party that made the initial offer can then choose to accept or reject the counteroffer.

In contract law, this principle is crucial for understanding the dynamics of negotiations and the formation of binding agreements. A counteroffer indicates a willingness to negotiate further, but it fundamentally shifts the framework from which the parties operate. Therefore, the initial offer ceases to exist once a counteroffer is made, leading to the conclusion that the initial offer is void.