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.Continue Reading
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
Benefits of reading the terms and conditions of an agreement include avoiding extra fees or charges, being certain about the length of your contract, and knowing whether a contract can be canceled, according to Webroot. Neglecting to read terms and conditions can lead to significant problems.Full Answer >
A contract cancellation forms contains the terms under which a party is permitted to terminate a contract agreement, according to Rocket Lawyer. The form also states when the contract ends.Full Answer >
A nondisclosure agreement is a contract where a receiver of confidential, proprietary information, promises to not disclose that information without authorization, according to Nolo's Plain English Law Dictionary. A nondisclosure agreement protects trade secrets or business ideas where some exchange is desired in order to explore that confidential information.Full Answer >
A closing on a land contract involves the purchase agreement, making the necessary down payment, signing the contract and filing a memorandum that serves as a public notice of the buyer's intent to purchase the property, states Nolo. Once the terms of the contract are met, the closing statement is prepared, title insurance is obtained, and the deed and other closing documents are filed to confirm the official transfer of the property.Full Answer >