Definition of a Binding Agreement

The term binding agreement denotes an agreement that is legally binding and cannot be broken or violated by either party. Breaking a binding agreement is prosecutable in a court of law.

How To Create One

A binding agreement is considered valid if both parties have consented to all the terms of the contract. This happens after one party presents an offer to the other party and the agreement is accepted within a timely fashion.

When It Is Not Binding

An agreement is not considered binding unless both parties have agreed to all of the terms of the contract. If a party offers different terms, the binding contract is considered invalid until the other party has agreed to the new terms.

Restrictions

A binding agreement can only be made between two parties with the capacity to understand all of the terms of the contract. This means those with mental disabilities may not make binding agreements on their own.

Termination

Termination of a binding contract is possible before the terms of the contract have been fully carried out if the meeting of the terms involves illegal activities, if one of the parties no longer exists or if one party is no longer able, due to physical or mental disability, to carry out the terms.

Consequences of Non-Compliance

When a binding contract is breached, the violating party can be taken to court by the other party. Damages are usually awarded according to the damages caused by non-fulfillment of the contract or through an order to perform certain services.

References

• Encyclopedia

Resources

• Attorney Pages
• Contracts Lawyers