LEGAL PRINCIPLE: CONTRACT LAW — Offer and Acceptance — Mutual Assent — Requirement of Meeting of Minds
PRINCIPLE STATEMENT
Mutual assent must be outwardly manifested; the test is objective, and a contract arises only when an offer is accepted, bringing the parties ad idem.
RATIO DECIDENDI (SOURCE)
Per Achike, JSC, in Sparkling Breweries Limited & Ors v. Union Bank of Nigeria Limited (2001) NLC-1131996(SC) at pp. 24–25; Paras D–A.
"The mutual assent must be outwardly manifested. The test of the existence of such mutuality is objective. See Norwich Union Fire Insurance Society v. Price (1934) AC 455, p.463. When there is mutual assent, the parties are said to be ad idem. An 'offer' is an expression of readiness to contract on the terms specified by the offeror which if accepted by the offeree will give rise to a binding contract. In other words, it is by acceptance that the offer is converted into a contract."
EXPLANATION / SCOPE
A binding contract requires mutual assent (consensus ad idem). The test is objective: what would a reasonable person understand from the parties’ words and conduct? An offer is an expression of readiness to contract on specified terms. Acceptance converts the offer into a binding contract. The parties must be ad idem—of the same mind—on the essential terms. The principle prevents one party from imposing a contract based on secret, unexpressed intentions. The manifestation of assent must be outward and clear. The court examines the objective evidence of agreement. The rule is fundamental to contract formation.