What is made when a party changes an offer in some way and communicates the change to the other party?

A counteroffer is indeed created when a party alters the terms of an original offer and communicates this modification to the other party. This action signifies that the original offer is no longer valid, as the party making the counteroffer is indicating a willingness to contract only on the new terms proposed. The essence of a counteroffer lies in its dual function: it concurrently rejects the initial offer while proposing a new set of terms for consideration.

This process is fundamental because it establishes a new negotiation point between the parties involved, rather than simply affirming or accepting the original terms. The original offeror must then decide whether to accept, reject, or further negotiate the terms of the counteroffer. Thus, a counteroffer is pivotal in contract law as it shapes the landscape of negotiation between parties, facilitating a dynamic exchange that could ultimately lead to a legally binding agreement based on mutually acceptable terms.