Future Business Leaders of America (FBLA) Business Law Practice Exam

What does rejection mean in the context of contract law?

1. Acceptance of an offer

2. A counter-offer made by the offeree

3. A refusal of an offer

4. A delay in responding to an offer

The correct answer is: A refusal of an offer

In contract law, rejection pertains to the offeree's decision to refuse an offer made by the offeror. When an offeree communicates that they do not wish to accept the terms proposed in the offer, this act constitutes a rejection. Once a rejection occurs, the original offer is effectively nullified, and the offeree cannot later accept that offer unless the offeror chooses to renew it. Understanding rejection is critical because it signifies the end of negotiations regarding the particular offer. It differs from a counter-offer, which involves a proposal to modify terms and is seen as a new offer itself. Rejection is a straightforward refusal, without proposing alternative terms. Additionally, it's important to note that merely delaying a response does not constitute rejection; such delays can lead to confusion about the status of the offer but do not terminate it unless explicitly communicated.