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2.2c Conditional acceptance and counteroffer

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It may have occurred to you that an offeree can impose conditions of his or her own as part of the acceptance of an offer. This creates a conditional acceptance scenario, which is, at law, no acceptance at all. At law, conditional acceptance (as opposed to conditions of acceptance) is considered a new or counteroffer.

To return to our example, your friend, as offeree, may, on the Saturday before the Sunday noon deadline, write the following note to you regarding the sale of your car: “I accept your offer.” In so doing, he will have met your condition and, thereby, accepted your offer in a way that the law will recognize as valid.

What if, on that same Saturday, your friend had instead written, “I accept your offer on the condition that the car is safety certified”? In that case, the offeree has still met the condition imposed on him, but imposed a condition of his own, namely, that the car must be safety certified.

How about, if instead of imposing a condition of his own, your friend (again, on the Saturday before the deadline) had written, “I accept your offer but I am only willing to pay $9,000 for your car.”

In both of these cases (i.e., where the offeree imposes a condition of his or her own on the offeror or changes a term of the offer) the original offer is deemed, at law, not to have been accepted and the offeree to have made a new offer of his own to the original offeror. In other words, the offeree has made a counteroffer and, in the process, has become the offeror. Correspondingly, the original offeror now has become the new offeree.

Most importantly, this now means that the original offer is no longer open for acceptance by the original offeree. He cannot make a counteroffer and keep the original offer open (unless the original offeror agrees to keep it open). As soon as the original offeree makes a counteroffer, he has reversed roles with the original offeror. It is now up to the original offeror whether he, in his new role as offeree, wants to accept or reject the counteroffer.

To bring it full circle, if the original offeror (who is now the new offeree) rejects the counteroffer, then the original offeree (who is now the new offeror) cannot go back and accept the original offer. As noted, it ended with the counteroffer.

Now if the original offeror/new offeree accepts the new offer but with new conditions or changes of his own (e.g., you tell your friend that you will take $9,500 for the car), then he again becomes the offeror and so on until the persons involved either agree on terms or part ways without further negotiation.

Canadian Business Contracts Handbook

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