Q:

What is a non-binding contract?

A:

Quick Answer

According to the United States Department of State, a non-binding contract lays out the terms of an agreement without obligating either party to fulfill the terms. It is used to create an understanding of an agreement before a formal agreement is written out or finalized. It can also be used to create a moral or political obligation without creating a formal agreement.

 Know More

Full Answer

The United States Department of State notes that when creating a non-binding contract, it is imperative that both parties understand and use language that reinforces the notion that the instrument is non-binding. Words such as "agreement," "parties," "shall," "agree" and "undertake" should be avoided because they could potentially change the implications of the contract. The source recommends that negotiators instead use hypothetical language such as "should," "expect to" and "intend." Utilizing a disclaimer in the document that marks it as unofficial and non-binding may prove useful in the event that either party attempts to enforce any part of a non-binding agreement.

About.com notes that other documents, such as quotes from a vendor, can also be considered as non-binding contracts. A quote from a vendor, such as a moving company, gives the client an idea of the services and charges that would be incurred to complete a job. However, these charges may not be all-inclusive. If the vendor provided the client with a binding estimate, the vendor would not be able to charge more than the estimated cost.

Learn more about Law

Related Questions

  • Q:

    How do you write a prenuptial agreement?

    A:

    To write a prenuptial agreement, contact an attorney who specializes in prenuptial agreements to draw up a contract stating how assets should be distributed in the event of a divorce. Partners should discuss the prenuptial agreement and be open about financial matters, advises Bankrate.com.

    Full Answer >
    Filed Under:
  • Q:

    Can my employer change my contract?

    A:

    Typically an employer cannot unilaterally alter the terms of an employment contract, according to the American Bar Association. Under basic contract law, all parties must have a meeting of the minds in order to amend a contract.

    Full Answer >
    Filed Under:
  • Q:

    What are vitiating elements in contract law?

    A:

    Vitiating elements of contracts are things that make a contract void, and the existence of such elements invalidate and negate the full terms of the legal document, according to the Social Science Research Network. Examples of such elements are mistakes in the contract, overall illegality of portions of the document, misrepresentation of facts, duress and undue influence.

    Full Answer >
    Filed Under:
  • Q:

    What does legal signature mean?

    A:

    A legal signature is one which indicates the signer's intent to comply with the terms of a contract. This signature can be either physical or electronic; the only requirement is that the signature be both voluntary and legitimate.

    Full Answer >
    Filed Under:

Explore