A non binding contract is an agreement in which the parties are not legally obligated to carry out its terms. ... If both parties agree to the terms of the non-binding contract, they can sign a binding contract afterward. There are also other situations in which a contract may be non-binding.

What does non-binding mean?

: having no legal or binding force : not binding a nonbinding agreement.

What is the point of a non-binding agreement?

A Heads of Agreement, properly drafted, is a non-binding document which sets out the key terms of a proposed agreement between parties. It is commonly used as part of the process of negotiating commercial transactions for example, the purchase of a business.