The essence of an agreement is the meeting of the minds of the parties in full and final agreement; there must, be consensus-ad-idem. The expression “agreement” as defined in section 2 (e) is essentially and exclusively consensual in nature (i.e.., before there can be an agreement between the two parties, there must be consensus-ad-idem).
This means that the parties to the agreement must have agreed about the subject-matter of the agreement in the same sense and at the same time. Unless there is consensus-ad-idem, there can be no contract. Example: ‘A’ who owns two horses named Rajhans and Hansraj. ‘A’ selling horse Rajhans to ‘B’. ‘B’ thinks that he is purchasing horse Hansraj. There is no consensus-ad-idem, there can be no contract.
