what is mean by binding contract?

Answer 1

Once the contract is signed by all the parties involved, the contract is now "binding" or in place and cannot be broken, except by the specifics noted in the contract to do so. Binding means you are required to take the action involved in the contract.

Answer 2

A binding contract is one that is legally enforceable.

Not all contracts have to be in writing (or signed). A verbal contract is just as biding, as long as it doesn't fall within a certain range of special categories. Every state has what is called the Statute of Frauds, which sets forth what types of contracts need to be in writing. The most common are sales (or long-term leases) for land, sale of goods over $500, contracts that cannot be performed in one year, etc. If the contract type falls under the Statute of Frauds, it must be in writing and is only enforceable against the parties who signed it.

Whether or not in writing, there are three essential components that a contract must have. The first is called mutual assent, meaning agreement (offer and acceptance) of the contract terms. If the parties did not agree to the same terms, then there is no mutual assent and it's generally not binding.

Second, the contract must set forth all essential terms. These vary by type of contract. For sale or lease of land, the contract must specify the parties and the price, and accurately describe the property in question. For services, the contract must identify the parties, and the work to be performed, as well as either the price per unit time (per hour, per day) or total price, which can be contingent on some other calculation (example: "half of profit earned"). Finally, for goods under the Uniform Commercial Code (UCC), the only required terms are the quantity and an identification of the goods. All other terms can be supplied implicitly following UCC rules.

If all of the required terms are not present, the contract is considered indefinite, and thus there could not have been a mutual assent (agreement) to all required terms. Also, an indefinite contract or one that is too ambiguous cannot be enforced through equity, though some damages may still be available.

Finally, to be binding and enforceable, each party to the contract mus provide consideration. This means a bargained-for-exchange of something of value, either a benefit conferred on the other party or a legal detriment incurred. A legal detriment can be a promise to do something, or it can be the surrender or waiver of a legal right. Bi-lateral contracts are usually a promise for a promise, with each side agreeing to do something. If there is no consideration, the contract is not binding.

Similarly, if there is no binding promise, because one party has the sole discretion whether they perform or not, then the contract is illusory and fails for lack of consideration.

Mutual assent (offer and acceptance), definite and certain terms, and bargained-for-exchange of consideration. These three requirements, plus the writing if required, constitute a binding contract. And if a contract is binding, then it can be legally enforced through the courts.

Answer 3

It means that it is a legal and binding contract and that you or the other person cannot just walk away during the contract. If you do get out of it you may be required to pay some sort of penalty. Double check the contract it should all be in there.

Answer 4

For a contract to be binding it not only needs to have been signed by all parties to it but each party needs to have sufficient capacity and authority to sign (eg individuals can not be minors and corporate entities need to be have duly authorised to sign the contract).

Even if a contract is binding, failure by one party to perform will not necessarily mean the contracts is able to be terminated. It will depend on the seriousness of the breach and whether the contract itself provides for termination in the event of such breach.

Answer 5

It means that both parties involved in the contract have to abide by the terms on it.

If one party breaks the contract, the other party can sue.

Answer 6

It means that you cannot easily get out of the terms of the contract once you sign.

Answer 7

It means that if you signed it, you agreed to EVERYTHING in it. That is what any contract is about. If you don't like it now, you lose.

Answer 8

a binding contract, just that, BINDING

Answer 9

It means it will stand up to most judicial review as one that can not be broken easily by either party,