What makes a binder a valid contract?

A binder serves as a preliminary agreement indicating that the involved parties have reached a mutual understanding, typically before the finalization of a more formal contract. For a binder to be considered a valid contract, it must be in writing, signed by all parties, and communicated to the offeror.

The written aspect ensures that there is tangible evidence of the agreement, while the signatures signify that all parties have consented to the terms outlined in the binder. Communication to the offeror confirms that they are aware of the terms and agree to proceed under those conditions. This combination of requirements reinforces the validity of the binder by making sure that it fulfills necessary legal standards for enforceability and clarity in the contractual relationship.