When a buyer submits an offer to a seller, the seller can respond in one of three ways. First, they can accept the offer as is. Next, they could just outright reject the offer if it just isn’t in the ballpark of what they would accept. Alternatively, the seller can choose to counter the seller’s offer.
That would then start the process of counter offers going back and forth between buyer and seller until they come to a meeting of the minds. Unlike real estate sales, business sales don’t typically have too many counter offers going back and forth during contract negotiation. Business buyers and sellers tend to be more direct and to the point, as they don't have time to waste.
What it Looks Like
On a standard counter offer form, the party sending the counter offer agrees to all of the previously proposed terms, EXCEPT for the items they list on the counter offer. The terms listed are the specific terms of the agreement that are being countered. Putting these terms on the counter offer form will override the same terms on any previous offers or counters.
Often we will see the main terms of a contract, like purchase price, closing date, deposit amount, due diligence period, etc on a counter offer. However, buyer and seller can counter any part of the agreement that they see fit. Then the other party has the choice to accept, reject, or counter again.
The Entire Agreement
In the situation where counter offers are present, each counter offer, including the original offer, make up the entire asset purchase agreement. The original offer and each subsequent counter offer all have terms that are included in the entire agreement. So don’t be surprised when your business broker asks you to sign all of the offer pages, including the original offer and all counter offers, as they constitute the entire agreement.