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Counter-Offer: question from Mock Exam BPP exam tick

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA LW Exams › Counter-Offer: question from Mock Exam BPP exam tick

  • This topic has 1 reply, 2 voices, and was last updated 10 years ago by MikeLittle.
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  • April 12, 2015 at 11:16 am #241005
    gabbi08
    Member
    • Topics: 135
    • Replies: 181
    • ☆☆☆

    Dear Mike

    Could you kindly help with below question?

    Under the UN Model Law on Contracts for the International Sale of Goods, what is the effect of a counter-offer on the original offer?

    A Acceptance of the original offer as it stands
    B Acceptance of the original offer with new terms introduced
    C Rejection of the original offer
    D No effect on the original offer

    My answer is C based on the art 19 (1) of UNCITRAL:

    A reply to an offer which purports to be an acceptance but contains
    additions, limitations or other modifications is a rejection of the offer and
    constitutes a counter-offer.

    The book answer is below for following explanation

    B. Under the Model Law the counter offer has the effect of introducing new terms into the original offer and these new terms will form part of the acceptance as long as the offeror does not object.

    Based on my understanding the answer provided by the book is referring to Art 19 (2)

    Art 19 (2) However, a reply to an offer which purports to be an acceptance
    but contains additional or different terms which do not materially alter the
    terms of the offer constitutes an acceptance, unless the offeror, without undue
    delay, objects orally to the discrepancy or dispatches a notice to that effect.
    If he does not so object, the terms of the contract are the terms of the offer
    with the modifications contained in the acceptance

    Should the counter offer be considered as a rejection of the original offer or an acceptance which contains different terms?

    Thanks a lot in advance for your help
    Best Regards

    Gabbi

    April 12, 2015 at 4:51 pm #241025
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23327
    • ☆☆☆☆☆

    If the question had referred to the inclusion of immaterial alterations, then choice B would be correct.

    But given the wording of the question this is a counter offer and therefore rejects the original offer. If it’s only immaterial alterations, it’s not a counter offer – it’s immaterial additions, alterations, amendments

    But this question clearly states “counter offer” so my answer would be C (the same as yours!)

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