Meeting of the Minds – Definition

Cite this article as:"Meeting of the Minds – Definition," in The Business Professor, updated October 22, 2019, last accessed October 21, 2020,


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.

References for “Meeting of the Minds

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