Investor's wiki



What Is a Counteroffer?

A counteroffer is a response given to an initial offer. A counteroffer means the original offer was dismissed and supplanted with another. The counteroffer gives the original offerer three options: acknowledge the counteroffer, reject it, or make another offer.

Counteroffers are common in many types of business negotiations, transactions, private and public deals between two people or two substances. You might track down them in real state deals, employment exchanges, vehicle sales, private positions, mergers acquisitions, takeovers, and so on.

Figuring out Counteroffers

At the point when two gatherings get together to arrange a transaction or business deal, one might put an offer on the table. A counteroffer is a reply to that original offer and may change the terms of the deal, including the price. The price might be greater or not as much as the thing was originally quoted relying upon who makes it. So on the off chance that the person getting the original offer doesn't acknowledge or dismiss it, they might choose to reevaluate with a counteroffer.

For instance, Ms. X chooses to put her home on the market for $300,000. Mr. Y sees it and makes an offer of $285,000 all things considered. Ms. X chooses to make a counteroffer of $295,000 all things being equal, in this manner putting the onus on Mr. Y to acknowledge, reject, or counter that offer and proceed with talks once more.

There is no restriction to the number of times each party can counter during talks. While countering this way and that, each offer ought to introduce a price not exactly the previous offer. This passes on to the seller that the buyer is approaching the last offer.

Neither one of the gatherings is committed to settle until they settle on a contract, which happens once the counteroffer is accepted. This is the point at which a binding contract is framed. The contract is enforceable against one or the other party. The counteroffer voids a previous offer, and the entity that introduced that offer is presently not legally responsible for it.

While arranging, never let feelings influence discussions — all things considered, ask questions, do all necessary investigation, and ask for extra chance to think about the new offer.

Terms of a Counteroffer

A counteroffer might incorporate clarifications of the terms of the offer or demands for valuable data. Finishing counteroffer exchanges requires the buyer and offeror to acknowledge the terms with practically no extra conditions or changes.

A counteroffer is generally conditional. At the point when the seller gets a low offer, the seller can counter with a price that is considered reasonable. The buyer can either acknowledge that offer or counter once more. The seller can counter the offer. The person getting the counteroffer doesn't need to acknowledge it.

Illustration of Counteroffer

For instance, a seller needs to sell a vehicle for $20,000. A buyer shows up and offers $15,000 for the vehicle. The offerer gives a counteroffer, asking for $16,000 with the objective of getting a higher price. If the offeree declines, the offerer can't force the buyer to purchase the vehicle at $15,000, even however the buyer suggested that price.


  • Counteroffers are common in business discussions and transactions, for example, real estate deals, vehicle sales, and employment contracts.
  • Parties are not committed by a contract until one acknowledges the other's offer.
  • Counteroffers give the original offerer three options: acknowledge it, reject it, or make another offer and proceed with discussions.
  • A counteroffer is the response given to an offer, meaning the original offer was dismissed and supplanted with another.