A counter-offer is a method by which an offer can be terminated. It occurs when the offeree does not simply accept the original offer but proposes different terms.

Effect

Making a counter-offer constitutes a rejection of the original offer. Simultaneously, the counter-offer creates a new offer. Once the original offer is rejected by the counter-offer, a subsequent attempt to accept the original offer will not result in its reinstatement.

Example

If an offer is made to sell 20 pens at P1,000 each, and the offeree responds by stating a willingness to purchase 30 pens at the same price, this is considered a qualified acceptance and there is no perfected contract. This qualified acceptance functions as a counter-offer, terminating the original offer and proposing a new one. If the offeree had been content with purchasing the original 20 pens but desired 10 more, a perfected sale for the original 20 would exist, and the desire for the additional 10 would be a new offer.