Like the offeror, the offeree also has the power to terminate an offer. Remember, the offeree is the person in whom the power of acceptance was created. With respect to an offeree, an offer can be terminated through a lapse in time, or through rejection. Let’s explore each one of these possibilities.

An offer can be terminated by the offeree through a lapse in time. Here, if the offeree fails to accept an offer within the time specified by the offeror, then the offer terminates. Furthermore, if no time is specified by the offeror, then the offer will terminate after a reasonable period of time has passed with no acceptance of the offer.

An offer can also be terminated by the offeree through rejection of the offer made. The rejection of an offer goes into effect when the rejection is received by the offeror. An offer can be rejected by an offeree through an express rejection, or through the creation of a counteroffer. A counteroffer is both a rejection of the original offer made to the offeree, and the creation of a new offer. Counteroffers often occur in the buying and selling of real estate. For example, assume a buyer offers a seller $180,000 for a house being sold by the seller for $200,000. The seller may counteroffer the buyer’s $180,000 offer with a price of $190,000.

Next, let’s take a look at how an offer can be terminated by operation of law.