All India Bar Examination (AIBE) 6-VI Previous Year Question Papers with Answers

The correct option is D: Meeting of the minds.

Consensus ad idem is a Latin term that means agreement. In contract law, it means that there has been a meeting of the minds of all parties involved and everyone involved has accepted the offered contractual obligations of each party. This is the first principle that's the foundation of enforceable contracts because for contracts to be enforceable, agreement or a meeting of the minds of all involved parties, is required.

Consensus ad idem is not established by a lone clause in a contract. It requires examining the full scope of the agreement to find out whether the parties each fully understand enough about the contract for a court to enforce it. Each investigation of contract terms and understanding is unique to its contract. No single test decides whether both parties understood the terms of the contract when making the agreement.

Consensus ad idem is not related to good faith, opinion of third parties, or opinion of the offeree. Good faith is a general principle that implies honesty and sincerity in dealing with others. Opinion of third parties is not relevant for determining the existence of consensus ad idem, as only the parties to the contract are bound by it. Opinion of the offeree is not sufficient for creating consensus ad idem, as it also requires the offeror's consent and acceptance.