What Is the Definition of Mutual Agreement ?

Blend Images – Jose Luis Pelaez Inc/Brand X Pictures/Getty Images

A mutual agreement is when two parties undertake obligations to each other to do, or refrain from doing, one or more defined actions. A mutual agreement can be oral or in writing and is also known as a contract.

Requiring agreements to be mutual to be enforced is a relatively new concept. Middle Age courts considered enforcing promises made without mutual obligations. For example, in the Middle Ages, if one person promised another he would give him a cow, expecting nothing in return, and did not deliver that cow, a court might still enforce the promise.

In the 1500s, courts began requiring mutuality of covenant for agreements, meaning promises could only be enforced if they were given in return for what eventually would be called “consideration.” Soon the concept also became known as “quid pro quo,” the exchange of one promise or action for another. The early 20th century brought changes protecting both parties to a mutual agreement or contract. The detail required for the enforcement of mutual agreements was established by state legislatures and Congress and later enforced by state and federal courts. Starting in the mid-1960s, greater consumer protection was achieved, ensuring actual mutual agreement between consumers and large corporations.