What does 'meeting of the minds' refer to?

The term "meeting of the minds" refers to a mutual agreement between parties that signifies they understand and accept the terms of a contract or agreement. It highlights the importance of the parties being on the same page regarding their intentions and the details of the agreement, which can occur even without formal documentation. This concept emphasizes that a contract can be legally binding if there is a clear and mutual understanding, even if it isn’t written down.

In the context of real estate, this means that before formal contracts are signed, if the involved parties (such as buyers and sellers) have reached a consensus about the essential terms of the deal—like price, date of transaction, and property description—there is a "meeting of the minds." The legal essence of a contract relies on this mutual agreement rather than the presence of a signature.

While formal signing of documents, financial terms of a lease, or finalization steps are important in the real estate process, they pertain more to the implementation and execution stages rather than the foundational concept of mutual agreement that characterizes a "meeting of the minds."