Meeting of the Minds Definition
A meeting of the minds refers to a consensus or agreement between two people or a group of people. Meetings of the minds is a term often used in contract law to describe a state in which every party to a contract is aware of the agreements reached in the contract and the obligations of each party. For a contract to be legal or formed, a meeting of the minds must occur as it pertains to the understanding of parties involved in the contract. Error, omission or misrepresentation in a contract that leads to parties in a contract being unaware of what are their duties mean a meeting of the minds did not occur in the first place.
A Little More on What is Meeting of the Minds
A meeting of minds starts from the parties to a contract knowing what the basic terms of the contract are and their individual roles. When a consensus is reached or opinions formed in a contract, a meeting of minds has occurred. In law, businesses, organizations, partnerships, and institutions are formed based on contract, in an investment pool, for instance, a contract must exist between the investors and their managers as to what their responsibilities are to make the investment successful. However, ambiguity in the terms of a contract or a breakdown of communication forfeits the important of a meeting of the minds and can cause a collapse of the contract or business agreement.
How a Meeting of the Minds Is Essential for Contracts
In all types of contracts, it is important that a meeting of the mind is held for the existence of the contract to be valid or legal. For instance, if there is an argument in a contract that challenges the validity of the contract, whether a meeting of the mids held or not is a major factor that determined how the dispute will be resolved. Also, in a breach of contract, a meeting of the minds help in determining who the defaulter is. Usually, in the courts of law, individuals that are parties to a contract challenge whether a true meeting of the minds occurred during the formation of the contract. This is done especially when some terms of the contract are misinterpreted or misconstrued.