Contracts and the Meeting of the Minds

When it comes to contracts and making them enforceable, all the parties to the contract need to be on the same page. There is a phrase for this, called the “meeting of the minds,” and although it may sound silly or almost science-fiction like, it’s actually an important part of contractual enforcement and drafting

A meeting of the minds means that both parties to the contract understand that they will be bound by a contract, and that they understand or at least had the chance to understand what the contract’s terms actually meant.

Both parties must intend to be bound by the contract, and have an understanding of the nature of the agreement.

What if Someone Doesn’t Understand?

Of course, there are scenarios where someone doesn’t read a contract, or reads it and just doesn’t understand it. That doesn’t mean there isn’t a meeting of the minds. All meeting of the minds actually means that the parties were “on the same page” about what they were contracting for.

But all of this allows a party to wiggle out of a contract, by saying that he or she didn’t understand the agreement or didn’t get clarification on the important terms of a contract. How does the law avoid this from happening? Just saying “gee I didn’t understand what you meant” can’t be an excuse for getting out of an agreement.

Courts will generally look objectively about whether parties understood what they were doing and what they agreed to-so someone’s subjective statement that they didn’t understand what they were doing (or that they didn’t read the entire agreement), won’t be a valid defense. In some cases a court can look at external factors, like the circumstances and dealings of the parties, to see if it was objectively reasonable to anticipate that there was a meeting of the mind.

And while it’s best practice to, of course, have or include all of the essential terms of a contract from the start, a lack of some essential terms, won’t automatically mean that there is no meeting of the minds.

It’s All About Acceptance

Of course, to have a meeting of the minds, there needs to be acceptance of the contract; a meeting of the mind implies that there is an enforceable agreement, which necessarily needs acceptance of an offer. so, the question of whether there is a meeting of the minds, is only relevant once there has actually been acceptance of the offer.

What About Ambiguity?

Ambiguity doesn’t mean that there is no meeting of the minds, nor does it invalidate an otherwise enforceable contract. Parties may understand what they’re being bound to, and agree to it, but the agreement itself may still be ambiguous. Ambiguous terms are always interpreted against the party that originally drafted the agreement.

Call our West Palm Beach business lawyers at The Law Offices of Larry E. Bray today for help with your business contract and agreements.

Sources:

investopedia.com/terms/m/meeting-of-the-minds.asp

jdsupra.com/legalnews/parties-must-have-a-meeting-of-the-7680542/