Meeting of the minds
Encyclopedia
Meeting of the minds is a phrase in contract law
used to describe the intentions of the parties forming the contract. In particular it refers to the situation where there is a common understanding in the formation of the contract. This condition
or element is often considered a necessary requirement to the formation of a contract
.
is usually credited with developing the will theory of contract in his work System des heutigen Römischen Rechts (1840).
Sir Frederick Pollock is one person known for expounding the idea of a contract based on a meeting of minds, at which time it gained much support in the courts.
Oliver Wendell Holmes
wrote in 1897 that a meeting of minds was really a fiction.
The English contracts scholar Richard Austen-Baker has suggested that the perpetuation of the concept into current times is based on a confusion of it with the concept of a consensus ad idem ("agreement to the [same] thing") which is an undoubted requirement of synallagmatic contracting, and that this confusion may be the result of recent ignorance of Latin.
In Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256, Bowen LJ said,
In Baltimore & Ohio R. Co. v. United States
(1923) the US Supreme Court said an implied in fact contract
is,
The reasoning is that a party should not be held to a contract
that they were not even aware existed. A mutual promise
between friends over simple personal matters should not be a situation where legal remedies
are to be used. Equally, any such agreement where the obligation
is primarily a moral
one rather than a legal one should not be enforceable. It is only when all parties involved are aware of the formation of a legal obligation is there a meeting of the minds.
However, the awareness of a legal obligation is established, not through each party's subjective understanding of the terms, but on "objective indicators," based on what each party said and did.
Under the formalist theory of contract, every contract must have six elements: offer, acceptance, consideration
, meeting of the minds, capacity
and legality
. Many other contracts, but not all types of contracts, also must be in writing and be signed by the responsible party, in an element called form.
, undue influence
, duress
(see per minas
), mutual mistake, or misrepresentation
.
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
used to describe the intentions of the parties forming the contract. In particular it refers to the situation where there is a common understanding in the formation of the contract. This condition
Condition
-Logic:* Logical conditional* Necessary and sufficient condition, condition of another means that the former statement is true if and only if the latter is true-Computer programming:* Conditions, a generalization of exceptions in exception-handling...
or element is often considered a necessary requirement to the formation of a contract
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
.
Concept in academic work
German jurist, Friedrich Carl von SavignyFriedrich Carl von Savigny
Friedrich Carl von Savigny was one of the most respected and influential 19th-century jurists and historians.-Early life and education:...
is usually credited with developing the will theory of contract in his work System des heutigen Römischen Rechts (1840).
Sir Frederick Pollock is one person known for expounding the idea of a contract based on a meeting of minds, at which time it gained much support in the courts.
Oliver Wendell Holmes
Oliver Wendell Holmes, Jr.
Oliver Wendell Holmes, Jr. was an American jurist who served as an Associate Justice of the Supreme Court of the United States from 1902 to 1932...
wrote in 1897 that a meeting of minds was really a fiction.
"In the law of contract the use of moral phraseology led to equal confusion, as I have shown in part already, but only in part. Morals deal with the actual internal state of the individual's mind, what he actually intends. From the time of the Romans down to now, this mode of dealing has affected the language of the law as to contract, and the language used has reacted upon the thought. We talk about a contract as a meeting of the minds of the parties, and thence it is inferred in various cases that there is no contract because their minds have not met; that is, because they have intended different things or because one party has not known of the assent of the other. Yet nothing is more certain than that parties may be bound by a contract to things which neither of them intended, and when one does not know of the other's assent. Suppose a contract is executed in due form and in writing to deliver a lecture, mentioning no time. One of the parties thinks that the promise will be construed to mean at once, within a week. The other thinks that it means when he is ready. The court says that it means within a reasonable time. The parties are bound by the contract as it is interpreted by the court, yet neither of them meant what the court declares that they have said. In my opinion no one will understand the true theory of contract or be able even to discuss some fundamental questions intelligently until he has understood that all contracts are formal, that the making of a contract depends not on the agreement of two minds in one intention, but on the agreement of two sets of external signs — not on the parties' having meant the same thing but on their having said the same thing."
The English contracts scholar Richard Austen-Baker has suggested that the perpetuation of the concept into current times is based on a confusion of it with the concept of a consensus ad idem ("agreement to the [same] thing") which is an undoubted requirement of synallagmatic contracting, and that this confusion may be the result of recent ignorance of Latin.
Use in case law
In Household Fire and Carriage Accident Insurance Co Ltd v Grant (1879) 4 Ex D 216, Thesiger LJ said, in the course of a judgment on the postal rule,"Now, whatever in abstract discussion may be said as to the legal notion of its being necessary, in order to the effecting of a valid and binding contract, that the minds of the parties should be brought together at one and the same moment, that notion is practically the foundation of English lawEnglish lawEnglish law is the legal system of England and Wales, and is the basis of common law legal systems used in most Commonwealth countries and the United States except Louisiana...
upon the subject of the formation of contracts. Unless therefore a contract constituted by correspondence is absolutely concluded at the moment that the continuing offer is accepted by the person to whom the offer is addressed, it is difficult to see how the two minds are ever to be brought together at one and the same moment... But on the other hand it is a principle of law, as well established as the legal notion to which I have referred, that the minds of the two parties must be brought together by mutual communication. An acceptance, which only remains in the breast of the acceptor without being actually and by legal implication communicated to the offerer, is no binding acceptance.
In Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256, Bowen LJ said,
"One cannot doubt that, as an ordinary rule of law, an acceptance of an offer made ought to be notified to the person who makes the offer, in order that the two minds may come together. Unless this is done the two minds may be apart, and there is not that consensus which is necessary according to the English law - I say nothing about the laws of other countries - to make a contract."
In Baltimore & Ohio R. Co. v. United States
Baltimore & Ohio R. Co. v. United States
Baltimore & Ohio Railroad Co. v. United States, 261 U.S. 592 , is a US Supreme Court case on contract law. The Supreme Court held that an implied in fact contract exists as, “an agreement … founded upon a meeting of minds, which, although not embodied in an express contract, is inferred, as a...
(1923) the US Supreme Court said an implied in fact contract
Implied in fact contract
An implied-in-fact contract is a contract agreed by non-verbal conduct, rather than by explicit words. As defined by the United States Supreme Court, it is "an agreement 'implied in fact'" as "founded upon a meeting of minds, which, although not embodied in an express contract, is inferred, as a...
is,
"an agreement ... founded upon a meeting of minds, which, although not embodied in an express contract, is inferred, as a fact, from conduct of the parties showing, in the light of the surrounding circumstances, their tacit understanding."
The reasoning is that a party should not be held to a contract
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
that they were not even aware existed. A mutual promise
Promise
A promise is a commitment by someone to do or not do something.In the law of contract, an exchange of promises is usually held to be legally enforceable, according to the Latin maxim pacta sunt servanda.- Types :...
between friends over simple personal matters should not be a situation where legal remedies
Legal remedy
A legal remedy is the means with which a court of law, usually in the exercise of civil law jurisdiction, enforces a right, imposes a penalty, or makes some other court order to impose its will....
are to be used. Equally, any such agreement where the obligation
Obligation
An obligation is a requirement to take some course of action, whether legal or moral. There are also obligations in other normative contexts, such as obligations of etiquette, social obligations, and possibly...
is primarily a moral
Moral obligation
The term moral obligation has a number of meanings in moral philosophy, in religion, and in layman's terms. Generally speaking, when someone says of an act that it is a "moral obligation," they refer to a belief that the act is one prescribed by their set of values.Moral philosophers differ as to...
one rather than a legal one should not be enforceable. It is only when all parties involved are aware of the formation of a legal obligation is there a meeting of the minds.
However, the awareness of a legal obligation is established, not through each party's subjective understanding of the terms, but on "objective indicators," based on what each party said and did.
Under the formalist theory of contract, every contract must have six elements: offer, acceptance, consideration
Consideration
Consideration is the central concept in the common law of contracts and is required, in most cases, for a contract to be enforceable. Consideration is the price one pays for another's promise. It can take a number of forms: money, property, a promise, the doing of an act, or even refraining from...
, meeting of the minds, capacity
Capacity (law)
The capacity of both natural and legal persons determines whether they may make binding amendments to their rights, duties and obligations, such as getting married or merging, entering into contracts, making gifts, or writing a valid will...
and legality
Legality
The principle of legality is the legal ideal that requires all law to be clear, ascertainable and non-retrospective. It requires decision makers to resolve disputes by applying legal rules that have been declared beforehand, and not to alter the legal situation retrospectively by discretionary...
. Many other contracts, but not all types of contracts, also must be in writing and be signed by the responsible party, in an element called form.
Destruction of mutual assent
Mutual assent or meeting of the minds is destroyed by such actions as fraudFraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...
, undue influence
Undue influence
Undue influence is an equitable doctrine that involves one person taking advantage of a position of power over another person. It is where free will to bargain is not possible.-Undue influence in contract law:...
, duress
Duress
In jurisprudence, duress or coercion refers to a situation whereby a person performs an act as a result of violence, threat or other pressure against the person. Black's Law Dictionary defines duress as "any unlawful threat or coercion used... to induce another to act [or not act] in a manner...
(see per minas
Per minas
Per minas, in British common law, to engage in behavior "by means of menaces or threats".The term comes from Latin.Per minas has been used as a defense of duress to certain crimes, as affecting the element of Mens rea...
), mutual mistake, or misrepresentation
Misrepresentation
Misrepresentation is a contract law concept. It means a false statement of fact made by one party to another party, which has the effect of inducing that party into the contract. For example, under certain circumstances, false statements or promises made by a seller of goods regarding the quality...
.
See also
- ContractContractA contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
- Offer and acceptanceOffer and acceptanceOffer and acceptance analysis is a traditional approach in contract law used to determine whether an agreement exists between two parties. Agreement consists of an offer by an indication of one person to another of the offeror's willingness to enter into a contract on certain terms without...
- Agreement in English lawAgreement in English lawIn English contract law, an agreement establishes the first stage in the existence of a contract. The three main elements of contractual formation are whether there is offer and acceptance consideration an intention to be legally bound....
- Raffles v Wichelhaus