Which statement about the effect of a counteroffer is true?

• A. The original offer remains open.
• B. The original offer is extended.
• C. The original offer is terminated.
• D. The buyer was released from the original offer when the counteroffer was made.

Answer: (D)

A counteroffer ends the original offer because it is a rejection that brings a new offer to the table. When the seller responds with different terms, the buyer who originally made the offer is released from that first agreement—their obligation under the original terms is no longer in effect. The negotiation then continues with the new terms as the current offer, to which the other party can accept, reject, or propose another counteroffer. This is why this statement is true: the original offer is terminated the moment a counteroffer is made, freeing the buyer from that initial commitment while introducing a new proposal to consider.