A counteroffer is a two-step process that involves _______.

A counteroffer is indeed a two-step process that encompasses three critical elements: a rejection, a new offer, and the ability to be withdrawn prior to acceptance.

First, when a party makes a counteroffer, it inherently rejects the original offer. This rejection is an essential part of the counteroffer process, as it indicates that the original terms are not acceptable to the responding party.

Second, along with this rejection, the responding party presents new terms, constituting a new offer. The new offer may modify certain aspects of the original proposal, such as price, delivery terms, or any other contractual obligations. This change signifies a desire to negotiate rather than simply accept or deny the initial offer.

Lastly, the ability to withdraw a counteroffer prior to acceptance is a fundamental characteristic of this process. Until the counteroffer is accepted by the original offeror, the party that made the counteroffer retains the right to retract it. This aspect reinforces the nature of negotiation whereby parties can adjust their positions before finalizing an agreement.

By understanding these interconnected components of a counteroffer—rejection of the original offer, presentation of a new offer, and the right to withdraw—one can grasp how counteroffers function within the framework of contract law. This