What is a binding agreement? In principle, a binding agreement is a contract between two parties that can be legally enforced. Read 3 min In most cases, a non-binding agreement cannot be reached in court. In some cases, if both parties agree, the court may allow them to rewrite all or part of the contract in order to save the business relationship between the parties. In other cases, the judge may issue damages if the conduct of one party has caused losses to the other party. Whether you are in a relationship with a debtor, borrower or independent contractor, contracts are a commercial activity. You need them because they serve as legal provisions to protect your interests. If you sign a rental agreement, this contract is considered legally binding and you, as well as the person who rents the apartment, must now assume certain responsibilities. If there is a dispute over the basis of a contract or if there is an infringement, the parties may have to decide the matter in court. In addition to ensuring that both parties agree on the terms of an offer, the second element that guarantees the validity of a contract is that both parties exchange something valuable. This is important because it distinguishes a treaty from a unilateral declaration, or even a gift. “Something of value” could be a promise to provide certain services from one party, while the other party agrees to pay a fee for the work done.