What does "mutual assent" signify in contract law?

Mutual assent signifies the agreement between parties on the contractual terms, which is essential for the formation of a valid contract. It involves both parties demonstrating a clear intention to enter into a binding agreement, typically through an offer and acceptance process. This mutual agreement ensures that each party has a shared understanding of the essential terms and conditions of the contract, confirming their willingness to be legally bound by those terms.

In contract law, mutual assent is fundamental because it reflects the voluntary nature of agreements. Without mutual assent, a contract lacks the necessary consensus, which can lead to disputes regarding the obligations of each party. Thus, the existence of mutual assent helps protect the interests of individuals and facilitate trust within business transactions.