Mutual agreement between contracting parties on the essential terms of their agreement.
Why Meeting of the Minds matters on the exam
This term belongs to Contracts. The questions below are real items from Freehold's bank that use it - each one cites its source.
Exam questions using Meeting of the Minds
Every Freehold question shows why the right answer is right — and cites its source.
Which of the following best describes 'mutual assent' in contract formation?
Both of the parties retaining separate attorneys
Both of the parties personally initialing every single page of the entire contract
A meeting of the minds created by a valid offer and an unqualified acceptance
The listing broker's own written approval of all the contract's terms before signing
Show answer & explanation
A meeting of the minds created by a valid offer and an unqualified acceptance — Mutual assent, often called a meeting of the minds, exists when one party makes a valid offer and the other party accepts its exact terms without qualification.
Source: PSI National Real Estate Exam Content Outline §7 Contracts
Broker Ann tells a seller that a buyer's written offer was orally accepted by the seller over the phone but the acceptance was never signed. Is a binding contract formed?
Yes, because an oral acceptance of any real estate offer is always sufficient to form a binding contract
Yes, because a witnessed telephone acceptance is generally enough to bind both parties
No, because a contract for the sale of real estate must generally be in writing and signed to satisfy the statute of frauds, even if there was an oral meeting of the minds
No, because only written offers rather than written acceptances are required under the statute of frauds in most states, so the seller's spoken words alone completed the contract here
Show answer & explanation
No, because a contract for the sale of real estate must generally be in writing and signed to satisfy the statute of frauds, even if there was an oral meeting of the minds — Even where the parties orally agree, a real estate purchase contract must satisfy the statute of frauds by being reduced to writing and signed to be enforceable.
Source: PSI National Real Estate Exam Content Outline §7 Contracts
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