A new concept of ion association in electrolyte solutions is presented in this paper. The starting point for our theory is the activity expansion of osmotic pressure in the physical picture and the energetic definition of bound states in the phase space of ions. The weight function describing the contributions of the bound states to the second cluster coefficients is calculated. It is established that ion screening has a substantial influence on the formation of bound states. The equation of state is written in the chemical picture by splitting the two-particle screened cluster coefficient into bound and free parts. We show that the bound part of the cluster coefficient in the physical picture can be identified with the association constant in the chemical picture. The mass action law is derived in a self-consistent way.