Counteroffer

When a counteroffer is made, the parties’ roles switch. By proposing new terms, Julie becomes the new offeror, and Alex becomes the offeree. It is common for negotiations to involve several offers and counteroffers before a final agreement is reached. A contract is formed once there is a meeting of the minds—meaning one party accepts the other’s offer and communicates that acceptance. At that point, both parties are legally bound to perform under the contract.