Mergers & Acquisitions
Mergers & Acquisitions
Resources: Glossary
Don’t be confused or intimidated by any terms or abbreviations in the M&A world. You’ll find answers here.
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 a clause regarding confidentiality; however, other clauses, such as those relating to purchase price, are intended to be non-binding. Some letters of intent include the binding and non-binding clauses in separate sections 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.