Mere Agreement in Contract: Understanding the Basics
When two parties enter into a contract, the primary concern is that both sides fulfill their obligations as outlined in the agreement. However, a common misconception is that an agreement is legally binding as soon as it is made – this is not always the case. The term «mere agreement» refers to a simple meeting of the minds between parties in a contract, without any further action or consideration. In this article, we will examine the concept of mere agreement and its implications in contract law.
What is Mere Agreement?
Mere agreement, also known as an «agreement to agree,» is a contract that sets out the basic terms of a future agreement but lacks specific details or binding provisions. It is simply a preliminary step towards a more formal contract. For example, two parties may agree to enter into a contract at a later date, but they have not yet determined the price or other key terms.
Mere agreement is not a legally binding contract because it lacks the essential elements of a valid agreement. In particular, it must have an offer, acceptance, consideration, and an intention to create legal relations. A mere agreement may have an offer and acceptance, but it does not have a consideration or an intention to create legal relations.
Implications of Mere Agreement
The implications of a mere agreement are significant. It means that neither party is obligated to follow through with the agreement, since it is not a legally binding contract. Either party can back out of the agreement without facing any legal consequences. This can be detrimental, particularly in business contracts, where parties may rely on a preliminary agreement to move forward with their plans.
To avoid this situation, it is essential to make sure that your contract includes all the necessary elements of a legally binding agreement. This means that both parties must agree on specific terms and conditions, including consideration, performance, and remedies for breach of contract.
Mere agreement is a preliminary step towards a more formal contract. It is not legally binding since it lacks the essential elements of a valid agreement. Parties must ensure that they have a legally enforceable contract that outlines all the necessary terms and conditions to avoid any misunderstandings or legal disputes. As a copy editor with experience in SEO, it is essential to ensure that all legal terms and concepts are accurately conveyed in articles related to contract law.