Mutual Assent

What Does Mutual Assent Mean?

Mutual assent occurs when two parties agree on the basic terms of a contract before signing it. It is one of the initial steps in finalizing an insurance contract. Reaching this point matters whether you’re shopping among the top car insurance companies or going through a life insurance agent, since the application only moves toward a binding agreement once both sides agree on the basic terms.

Insuranceopedia Explains Mutual Assent

If mutual assent is achieved, there is a strong likelihood that the contract will proceed. However, mutual assent does not guarantee the contract’s finalization. One party may change their mind before signing, or the assent could be withdrawn if it is discovered that one party misrepresented certain facts or if new information emerges. This is one reason it pays to read the policy details carefully when you’re choosing a life insurance policy, since a misunderstanding at the assent stage can unravel the whole contract later.