New York Real Estate Institute (NYREI) Practice Exam 2026 – All-In-One Guide to Pass Your Real Estate Exam!

In the context of contract law, a purchase and sale agreement typically requires that both parties have a mutual understanding and agreement on all essential terms to be considered valid. When Tom changed the commission and closing date after Jim had already accepted the offer, he essentially introduced new terms to the agreement. This action constitutes a counteroffer because it alters the original terms rather than simply accepting them.

For a contract to be valid, there must be a "meeting of the minds," which refers to both parties having a clear agreement on the same terms. In this scenario, since Tom altered key components of the contract without Jim's consent, the original acceptance is voided. Therefore, without Jim's agreement to the new terms proposed by Tom, there is no longer a mutual understanding of the agreement, making it invalid.

In summary, the concept of a meeting of the minds is essential in contract formation, and any modifications to the agreement must be accepted by both parties to ensure that the contract remains valid.