Paul offers to sell his multi-unit building in Québec City to Sarah for $800,000. Sarah counter-offers at $775,000. Paul rejects the counter-offer and then attempts to accept Sarah's initial offer of $800,000. Is there a valid contract formed?

Question: Paul offers to sell his multi-unit building in Québec City to Sarah for $800,000. Sarah counter-offers at $775,000. Paul rejects the counter-offer and then attempts to accept Sarah's initial offer of $800,000. Is there a valid contract formed?

Answer options:

• Yes, Paul can accept Sarah's initial offer as long as it has not expired. ✅ No, Sarah's counter-offer at $775,000 automatically terminated her initial offer of $800,000.
• Yes, because Sarah's initial offer was still open when Paul tried to accept it.
• No, because Paul had already rejected Sarah's counter-offer.

Correct answer: No, Sarah's counter-offer at $775,000 automatically terminated her initial offer of $800,000.

Explanation: A counter-offer is a new offer and implicitly constitutes a refusal of the initial offer, thereby terminating the initial offer according to Article 1393 of the Civil Code of Québec.