Non-Binding

Definition

Having no legal or binding force.

Tips

Non-binding is normally used in the context of a non-binding Letter of Intent (LOI). Technically some clauses in the LOI are binding, such as the clause regarding confidentiality; however, other clauses, such as those relating to purchase price, are intended to be non-binding. If the LOI is properly drafted, then the binding and non-binding clauses should be in a separate section or separately identified so there is no doubt as to which clauses are binding. Note that some courts, however, have interpreted a Letter of Intent to be binding, even though the parties intended it not to be so.