Counter Offer TPC – Practice Q9


What happen to offer when you negotiate? The original offer still stays?


Take for example, when you saw an advertisement to let - RM1,200 per month rental. You call the landlord/agent, and offer to rent at RM1,000 instead. What happened to the original RM1,200 asking rental?

That RM1,200 is not an offer. It is an invitation to treat. You offer is RM1,000. If the landlord/agent counter-offer RM1,100 to you, the offer of RM1,000 is no more. An counter-offer terminates the prior offer. There is no more RM1,200 and RM1,000. Therefore, when you take the counter-offer from landlord/agent at RM1,100 you can accept or reject. When you reject this counter-offer, you walk away. Of course, you can still counter offer at anywhere between RM1,000 to RM1,100. That is another counter offer. In between counter offers, there is no contract. Only when a counter offer is accepted a contract is about to be formed. Here, we say “about” to form because there is still lack of another element - consideration. When your counter offer is RM1,050, and the landlord/agent accepts that counter offer, you need to pay the money to make it a contract. As long as there is some money (earnest money) being paid (even part of RM1,050), it will render the agreement a contract with a condition (to fully paid up).

When you negotiate, the original offer is terminated by a counter offer. There is no contract no matter how many counter offers you made until one that is accepted with a consideration paid.