when two parties get together to negotiate a transaction or business deal one may put an offer on the table a counteroffer is a reply to that original offer and may change the terms of the deal including the price the price may be greater or less than what was originally quoted depending on who makes it so if the person receiving the original offer doesn t accept or reject it they may decide to renegotiate with a counteroffer 
for example ms x decides to put her house on the market for 300 000 mr y views it and makes an offer of 285 000 instead ms x decides to make a counteroffer of 295 000 instead thus putting the onus on mr y to accept reject or counter that offer and continue negotiations again there is no limit to the number of times each party can counter during negotiations when countering back and forth each offer should present a price less than the previous offer this conveys to the seller that the buyer is nearing the final offer neither party is obligated to settle until they agree on a contract which occurs once the counteroffer is accepted this is when a binding contract is formed the contract is enforceable against either party the counteroffer voids a previous offer and the entity that presented that offer is no longer legally responsible for it 