Which event does NOT lead to the termination of an offer by operation of law?

To determine which event does not lead to the termination of an offer by operation of law, it is essential to understand each option's legal implications regarding offers in contract law.

Lapse of time refers to a situation where an offer is no longer valid after a specified period has passed. When an offer has a time limit, and that time elapses without acceptance, the offer automatically terminates.

The subject matter becoming illegal also leads to the termination of an offer. If the legality of the subject matter changes, such as through new legislation or regulations, the offer becomes void.

The death of the offeror typically results in the termination of the offer as well. Once the offeror dies, the offer cannot be accepted, as the offer is considered a personal proposal.

In contrast, a counteroffer by the offeree does not terminate the original offer by operation of law; rather, it constitutes a new offer made by the offeree that effectively rejects the original offer. The original offer remains valid until it is either accepted or terminated by some other means. Therefore, while a counteroffer alters the dynamics of the negotiation, it does not terminate the original offer by law, making it the correct answer to the question.