Meeting Of The Minds

DEFINITION of 'Meeting Of The Minds'

An agreement between parties in which each party is aware of the commitments that is being made by each individual. Meeting of the minds, or consensus ad idem, is associated with contract law and is fundamental for the existence of a contract. If both parties to a contract make a mistake in the contract's creation, and may thus be agreeing to perform actions other than what both expected, there would not be a meeting of the minds.

BREAKING DOWN 'Meeting Of The Minds'

For example, a business needing to resupply its inventory of toys and speaks with a local supplier. The businessman indicates that he is looking to buy the supplier's stock, which he takes to be the supply of toys that the supplier has. The supplier, however, thinks that the businessman is looking to buy out his business, hence his "stock" of shares. Because both parties are not agreeing to the same material exchange there is no meeting of the minds, and thus no agreement.

RELATED TERMS
  1. Implied Contract

    A legal substitute for a contract. An implied contract is an ...
  2. Breach Of Contract

    Violation of any of the agreed-upon terms and conditions of a ...
  3. Contract Holder

    An individual or organization who owns the rights to a debt or ...
  4. Failure To Deliver

    An outcome in a transaction where one of the counterparties in ...
  5. Anticipatory Breach

    In contract law, an action that shows a party's intention to ...
  6. Ex Works (EXW)

    An international trade term requiring the seller to make goods ...
Related Articles
  1. Home & Auto

    Attention Home Buyers! Why You Need A Lawyer

    Property transactions are complex and subject to specific state/local rules. A professional can simplify the process.
  2. Personal Finance

    How To Pick The Right Lawyer

    Find out what factors to consider before hiring an attorney.
  3. Options & Futures

    Housing Deals That Fall Through

    Find why buyers back out and what you can do if you're left holding the bag.
  4. Home & Auto

    Protect Your Company From Employee Lawsuits

    Understanding employment practices liability insurance is easy, once you know the basics.
  5. Economics

    What's a Memorandum Of Understanding?

    A memorandum of understanding, or an MOU, is a written legal agreement.
  6. Bonds & Fixed Income

    What is an Indenture?

    An indenture is a legal and binding contract between a bond issuer and the bondholders.
  7. Term

    What are Mutually Exclusive Events?

    In statistics, mutually exclusive situations involve the occurrence of one event that does not influence or cause another event.
  8. Entrepreneurship

    Risks Associated With Government Contracts

    Government contracts can be rewarding, but they also come with a variety of risks.
  9. Entrepreneurship

    10 Public Companies That Rely On Govt. Contracts

    We look at 10 of the top public companies whose businesses rely on U.S. government contracts.
  10. Economics

    How Does an Operating Lease Work?

    Operating lease is a term used mostly in accounting to denote a lease that gives the lessee rights to use and operate an asset without ownership.
RELATED FAQS
  1. Are waivers of subrogation clauses ever ineffective in preventing a third-party lawsuit?

    Sometimes waiver of subrogation clauses are ineffective at preventing a third-party lawsuits. In determining who is responsible ... Read Full Answer >>
  2. What is an alienation clause?

    Whether used in reference to insurance policies, mortgages or commercial loans, an alienation clause stipulates that should ... Read Full Answer >>
Hot Definitions
  1. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
  2. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
  3. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
  4. Flight To Quality

    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This ...
  5. Discouraged Worker

    A person who is eligible for employment and is able to work, but is currently unemployed and has not attempted to find employment ...
  6. Ponzimonium

    After Bernard Madoff's $65 billion Ponzi scheme was revealed, many new (smaller-scale) Ponzi schemers became exposed. Ponzimonium ...
Trading Center