please explain this..."Binding effect"?

Question

We are trying to come to an agreement regarding a loan...and we would like to know what this portion of the note means....

"Binding effect" Except as otherwise provided in this Note, all of the covenants, conditions, and providision of this Note shall be binding upon the parties hereto and their respective heirs, personal representatives executors, administrators, successors, and assigns.

thank you soooo much

Answer 1

It means that you have to abide by what the covenants, conditions, and provisions say or face the consequences!

The consequences being the rescision of the contract or the other party bringing a legal action for damages against you!
The second part means that if you should die, or transfer your interests in some way, your successors will also have to comply with the terms of the agreement. But then so will those of the other side!

Answer 2

When an agreement is binding, each person/company who signs the agreement is bound by law to carry out his responsibilities under the terms of the agreement. Therefore, by signing the agreement, you are giving it a "binding effect" ... agreeing to be responsible for your end of the bargain. If you do not carry out your end of the agreement, you can be prosecuted in court.

The rest of the clause says that anyone who, after your death, is a beneficiary of your estate, is bound by law to complete your responsibilites under the terms of the agreement (pay back the remainder of the loan). Generally, paying back any debts must be done before the estate can be distributed to your beneficiaries. It essentially means that YOUR ESTATE is responsible to clear the loan before any beneficiaries can get the remainder of any money you may have left.

The words "personal representatives, executors, and administrators" essentially mean any person given the responsibility (by you in a Will or by the court of there's no Will) of distributing your estate according to law.

The words "heirs, successors, and assigns" mean anyone who has a benefit from your estate after your death. The differences just indicate whether there is a Will or whether you died without leaving a Will.

Hope this helps.

Answer 3

Action authorized by law, brought by agreement between the parties, to secure a Judgment that will have a binding effect in circumstances where a mere agreement or settlement will not.

For example, a claim in favor of an infant or another lacking legal capacity to enter into a binding contract can for that reason be settled only through the entry of a judgment.

You get a loan....it's got to be paid unless otherwise directed by a court of law!

Best wishes!

Answer 4

Without seeing the rest of the contract, this would mean that everything in the contract is binding against the parties to the contract, and anyone who should take the place of the parties (heirs, assigns, etc). It can be enforced against all of those people listed should they become parties to the contract.

If you have questions about a contract, I would suggest reviewing it with an attorney before you sign. Contracts have legal consequences. You should get as much information as possible before you sign.

Answer 5

The contract binds not only you but also your heirs, personal reps., executors or administrators if you die. And it binds anyone who succeeds to your rights under the contract and anyone to whom you assign the contract.