How binding is a binder?


Not usually.  While a binder may contain all the elements of a contract and is signed by both parties it is extremely unlikely that either party could enforce the binder.  A binder is usually only a prelude to a contract which is prepared by attorneys. A signed binder (without  a fully signed contract) will not be enforced by most courts as case law holds that even when a binder agreement has the necessary elements of a contract the parties intention was to use the binder to prepare a contract and not as a contract in its own right.

GOOD PRACTICE TIP:  Review the binder with your attorney before you sign.  If this is not possible add “Subject to Attorney Review” to the binder to allow your attorney to change or cancel the binder after it is signed.