Buyer contracts to buy an item, such as a house, subject to the condition that feature X (perhaps the swimming pool), is in working order (it's clear in the contract that this is an essential condition). After the signing, but before the transfer of funds, it is found that X is not in working condition, thereby violating this essential condition.
It costs $10,000 to bring X into working condition. The seller doesn't have the $10,000. The buyer wants out, and says "no repairs, no deal." The seller counters by saying, "Please give me $10,000 so that I can make the repairs, and deliver the house, in promised condition," or even "I will lower the net purchase price by the cost of the repairs so that the gross purchase price to you is the same." In essence, the seller is asking the buyer to "front" the repair cost.
Can the seller's counteroffer bring about the operation of the original contract? Or was the original contract's intent violated so that a new contract needs to be negotiated and signed?