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.