The word agreement can have both informal and formal meanings. Informally the word may be used to describe a contractual agreement between parties: ‘the agreement has three months to run’. The formal meaning of the word is used in a legal context to describe one of the prerequisites for considering a contract valid. The parties must have ‘a meeting of the minds’, sometimes called ‘consensus ad idem’, meaning that for a contract to exist the parties must share a common understanding, and there must be no mistake as to what is being agreed. See also Contract.