What is a contract proposal submitted in response to a previous offer that modifies the terms of the original offer called?

A contract proposal submitted in response to a previous offer that modifies the terms of the original offer is termed a counteroffer. This occurs when the offeree responds to the original offer with terms that differ from those proposed, effectively nullifying the initial offer. By doing so, the offeree proposes new terms they are willing to accept, which then gives the original offeror the opportunity to accept, reject, or further negotiate the altered terms.

This process is crucial in contract law as it clarifies that both parties must agree on the final terms for a legally binding contract to be established. A counteroffer indicates that the negotiations are ongoing, and no agreement has been finalized until both parties concur on the revised terms. This distinguishes a counteroffer from a contingency, which is a condition that must be met for a contract to be executed, or from a contract for deed, which pertains to a specific type of real estate transaction. Similarly, a conventional loan refers to a standard type of mortgage agreement and is not related to the negotiation of contract terms.