When the Nelsons mail their letter on October 5th, there is no immediate legal effect on the Cleavers’ proposal. This is due to the Rejection Mail Box Rule which states that a rejection is effective when it is received by the offeror. When the Cleavers receive the letter, they will understand that the Nelsons have rejected their offer and have proposed a new offer. The type of rejection used by the Nelsons here is called a counteroffer. A counteroffer is a clear refusal of the original offer and a proposal of a new offer. By proposing a counteroffer, the Cleavers’ previous offer for $500,000 with a 10% down payment ($50,000) due upon acceptance of the Cleavers’ offer is effectively rejected and the new offer made by the Nelsons for $525,000 with a 15% down payment ($78,500) due upon acceptance of the Nelsons’ proposal is now in place.
The Cleavers receive the Nelsons’ proposal from October 5th and respond via email asking a question regarding the offer for $525,000 with a 15% down payment ($78,500) due upon acceptance of the Nelsons’ proposal. The Cleavers ask the Nelsons how firm they are on the 15% ($78,500) down payment and ask the Nelsons if they would be willing to lower it down to 10% ($52,500). What the Cleavers’ email legally does is put two offers between the parties. An inquiry and alternate offer does not get rid of the original offer, but places an alternate offer alongside of the original one. In other words, the Cleavers are not rejecting the Nelsons’ offer but are rather proposing a new offer without rejecting the last one. This effectively puts two offers between the Nelsons and the Cleavers. Now the Nelsons can choose to accept either one of these offers which would clearly make the remaining offer void. The Nelsons receive the email the same day it was sent and respond by mailing a letter to the Cleavers revoking the offer they made in the October 5th letter for $525,000 with a 15% down payment ($78,500) due upon...
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