Mutual Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Mutual, written in plain English, along with examples of how it is used.
What is Mutual?
Any valid contracts made has to have consideration which is mutual. It is reciprocal right or agreement between the parties to something. For instance, a marriage between a man and woman is mutual if they want to marry each other.It also refers to understanding between two parties for a business deal and that they trust each other that such understanding would be followed or else there will be a breach.
History and Meaning of Mutual
The term "mutual" comes from the Latin word "mutuus," which means "reciprocal" or "interchangeable." In legal terms, the concept of "mutual" is related to the idea of consideration, which is an essential element of a valid contract. Consideration refers to the exchange of something of value between parties to the contract. To be legally binding, the consideration must be mutual and agreed upon by both parties.
Examples of Mutual
- Two parties enter into a written contract where one party agrees to provide services to the other in exchange for payment. The agreement is mutual because both parties are exchanging something of value (the services and the payment).
- A marriage is mutual if both parties agree to the union and have a desire to be married to each other.
- In a real estate transaction, both the buyer and the seller agree to the terms of the sale, including the price and conditions of the sale. The agreement is mutual because both parties have agreed to the terms.
- A business partnership is mutual if both partners have agreed to work together to achieve a common goal and share in the risks and rewards of the business.
Legal Terms Similar to Mutual
- Consideration: Something of value that is exchanged between parties to a contract in order to make the agreement legally binding.
- Reciprocity: The practice of exchanging something of value between parties, with both parties benefiting from the exchange.
- Contractual obligation: A legal requirement that one party must fulfill as a result of an agreement with another party.