If Seller B counters Buyer A's offer of $400,000 with a demand for $450,000 and A does not respond, what must happen for a contract to be valid?

If Seller B counters Buyer A's offer of $400,000 with a demand for $450,000 and A does not respond, what must happen for a contract to be valid?

• A. Buyer A must accept the offer of $450,000
• B. Seller B can sell to someone else immediately
• C. Buyer A must affirm the $400,000 offer
• D. Seller B must wait for a new offer before proceeding

Answer: (C)

For a contract to be valid, there must be mutual assent, meaning both parties must agree on the terms of the agreement. In this scenario, when Seller B counters with a demand for $450,000, the original offer of $400,000 from Buyer A is effectively rejected, and a new offer is created. Since Buyer A does not respond to the counteroffer, the original offer of $400,000 is still available but also at risk of expiration if not acted upon. For a contract to be valid in this context, Buyer A must affirm the original offer of $400,000. By accepting this initial offer, they create a binding agreement. Without a response from Buyer A or an acceptance of the $450,000 counteroffer, no contract exists. Therefore, affirming the original offer is essential to establish a legally binding agreement.

For a contract to be valid, there must be mutual assent, meaning both parties must agree on the terms of the agreement. In this scenario, when Seller B counters with a demand for $450,000, the original offer of $400,000 from Buyer A is effectively rejected, and a new offer is created. Since Buyer A does not respond to the counteroffer, the original offer of $400,000 is still available but also at risk of expiration if not acted upon.

For a contract to be valid in this context, Buyer A must affirm the original offer of $400,000. By accepting this initial offer, they create a binding agreement. Without a response from Buyer A or an acceptance of the $450,000 counteroffer, no contract exists. Therefore, affirming the original offer is essential to establish a legally binding agreement.