In contract law, what does a counter offer operate as?

In contract law, a counter offer operates as a rejection of the original offer. When the offeree responds to an offer with a counter offer, it effectively nullifies the original offer. This means that the terms of the original proposal are not accepted, and instead, new terms are being put forward for consideration. The essence of a counter offer is that it demonstrates the offeree's willingness to negotiate the terms rather than accept them as they are.

Once a counter offer is made, the original offer is no longer on the table, and the original offeror must then decide whether to accept, reject, or make another counter offer based on the new terms proposed. This understanding is crucial in contract negotiations as it indicates that both parties are engaged in a process of negotiation rather than simply agreeing to the initial terms presented.