Also known as: mutual · mutually · reciprocity · mutual assent
Written by attorneys · grounded in primary & secondary sources — see below
A requirement that promises in a contract be mutually binding so that each party provides consideration.
Select any source to read its text and confirm it supports the definition.
Maya Malik sold land to Midwest Airlines under a contract requiring the airline to repair a hangar after closing. At closing Maya delivered the deed without mentioning the repair duty. Midwest later refused the repairs and claimed the contract obligation had ended. The court held that the repair promise supplied no consideration after merger, destroying mutuality.
Meredith Maxwell offered to sell equipment to Matrix Technologies for a fixed price. Matrix understood the offer to include installation services while Maxwell meant only the equipment itself. Because the parties attached materially different meanings and neither knew of the other's understanding, no contract formed for lack of mutual assent and thus no mutuality of obligation.
Ming Ma and Mason McCarthy signed a writing stating each would leave the other a specific parcel in their wills. After Ma died, McCarthy revoked his will. The court enforced the agreement because the signed writing satisfied the statutory requirements and the mutual promises supplied consideration satisfying mutuality.
Melissa Mills, a resident of State A, contracted with Mirage Hotels in State B for a long-term lease. When a dispute arose, the court weighed the parties' justified expectations and the need for harmonious multistate relations before selecting which state's law governed the mutual obligations, confirming mutuality was satisfied under the chosen law.
Marcus Mitchell and his insurer were jointly represented in an auto accident suit. After the insurer became a defendant in a related action, the firm faced disqualification because prior confidential information created non-consentable conflicts that destroyed the mutuality of the representation and the binding nature of the promises exchanged.
Maxwell Manufacturing bought a warehouse from Midwest Airlines. The contract required the seller to build a fence on adjacent land. The deed omitted the fence duty. The court held the promise survived merger because it was independent of the conveyance and reflected the parties' intent to maintain mutuality of obligation.
A promise is illusory when one party retains complete discretion to perform or not perform. In that situation the promise supplies no consideration because it imposes no real obligation on that party.
Supporting sources
Mutuality requires only that each promise be binding when made. A promise that is voidable because of infancy or another defense still supplies consideration and satisfies mutuality.
Supporting sources
Merger may discharge some contract duties, but a promise that remains binding after closing continues to satisfy mutuality if it supplies consideration and is not illusory.
…fact, and the statesmen who founded this Nation knew too well that only a stagnant society remains unchanged." National Mutual Ins. Co. v. Tidewater Transfer Co. , 337 U. S. 582, 646 (dissenting opinion). Several decisions of this Court make clear that freedom of personal choice in matters of marriage and family…