Define: Consensus Ad Idem

Consensus ad idem is a Latin legal term meaning “agreement to the same thing.” In contract law, it refers to the principle that for a contract to be valid, there must be a mutual understanding and agreement between the parties regarding the essential terms and terms of the contract. This includes agreement on the subject matter, price, terms of performance, and other material terms of the contract. Consensus ad idem ensures that there is a meeting of the minds between the parties, and that they have a shared understanding of the rights and obligations created by the contract. If there is no consensus ad idem, or if there is ambiguity or misunderstanding regarding the terms of the contract, it may be unenforceable or voidable by one or both parties. Therefore, establishing consensus ad idem is essential for the formation of a valid and enforceable contract.

“Meeting of minds”.

Consensus ad idem is a Latin term commonly used in contract law. It translates to “meeting of the minds” in English. The principle of consensus ad idem refers to the mutual understanding or agreement between parties regarding the essential terms of a contract. In other words, for a contract to be valid, there must be a clear and unequivocal agreement between the parties involved on all the essential terms of the contract. This includes aspects such as the subject matter, price, terms of payment, and other important provisions. If there is no consensus ad idem, meaning if there is no meeting of the minds, the contract may be deemed void or unenforceable.

For a contract to be useful, the parties must be in agreement about its provisions. In the event of a possible breach of contract, the party alleged to be in breach may wish to claim that the contract did not exist at all, as there was no certainty about the subject of the contract. However, many contracts are not very precise to allow flexibility in business dealings, and a court may have to examine other dealings between the contracting parties to determine what their true intentions were.

It is not desirable, on the whole, to insist that all contracts are perfectly precise; this would make it difficult to do business. However, as a general rule, if a contract leaves something to be determined in the future, the determination itself must not require the agreement of the parties.

Here are some examples.

• In Nicolene v. Simmons (1953), the Court of Appeal refused to rule that a meaningless clause in a contract rendered the whole contract invalid; otherwise, it was argued, anyone who wished to renege on a contract could seek out a meaningless statement somewhere in the text.
• In May and Butcher Jr. (1934), a contract that stipulated that an arbitrator would be employed to settle disagreements (a common enough practice) was ruled invalid because the contract did not say what exactly the arbitrator would be called on to decide.
• In Scammel v. Ouston (1941), the contract was struck down because the court was unable to discern any actual details in the vague language used by the contracting parties.
• In Hillas v. Arcos (1932), the court ruled that the term ‘fair specification’ in a contract was valid, as the companies had done business frequently before and would have known each other’s requirements and terms.

This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.

This glossary post was last updated: 10th April, 2024.