What does a counteroffer indicate?

A counteroffer indicates a willingness to contract on different terms. When one party makes an offer and the other party responds with a counteroffer, they are effectively rejecting the original offer and presenting new terms that they are willing to accept. This response shows that the second party is open to negotiating and potentially reaching an agreement, but they want the terms to be modified in some way.

By making a counteroffer, the initiating party demonstrates a proactive approach to the negotiation process, signaling that they are still interested in entering into a contract, but only if specific adjustments are made. This is distinct from outright refusal to contract, which would imply that there is no interest in moving forward at all. It also differs from simply accepting the original offer, as a counteroffer clearly alters the proposal. Moreover, while a counteroffer may indicate a need for further negotiation, its primary essence is the introduction of new terms that show how one party envisions a mutually acceptable agreement. B is thus the most accurate representation of what a counteroffer signifies in contractual discussions.