Which action terminates an offer by the offeror?

The correct answer is revocation, as it specifically refers to the offeror’s ability to withdraw an offer before it has been accepted by the offeree. The offeror maintains the power to revoke the offer during the time it is open, provided that the revocation is communicated to the offeree before acceptance occurs. This principle is grounded in contract law, emphasizing the offeror's control over their own offer until it is formally accepted or otherwise legally terminated.

In contrast, rejection is an action taken by the offeree, which signifies a refusal of the offered terms. A counteroffer alters the original proposal and acts as a rejection of the initial offer, instead offering new terms for consideration. Lastly, lapse of time occurs when a specified time period for acceptance has expired or a reasonable time has passed without acceptance, which can also lead to the termination of the offer but does not involve the offeror taking any specific action to withdraw the offer. Revocation directly captures the offeror’s unilateral decision to terminate the offer, making it the correct choice.