Once both parties have reached a broad consensus on a partnership or transaction and have signed a contractual document, the next step is to involve lawyers and accountants to reduce the details. These details may contain a number of preconditions that must be met before a final agreement is reached. The next step is the signing of a binding contract, although a contract change can be terminated at any time by both parties with some reservations. Since most aspects of an agreement are non-binding, there are few remedies for non-compliance by either party. They apply only to the legally binding conditions mentioned above. If one party objects to these binding conditions, the other party may seek an injunction, a declaration of appropriate damages, damages or a specified benefit. If a party intends to make the agreement legally binding at this early stage, it is essential that it seek legal advice to ensure that this intention is clarified and that the agreement is sufficiently comprehensive to conclude a legally binding agreement. This approach can still be difficult when an argument arises before a complete documentation is completed. In this context, it may be preferable to wait for the relatively short period of time it would take for a full form agreement to be concluded before committing to supposedly binding conditions. The reality is that an agreement of the heads of state or government could be binding or not. In general, however, the objective is that the contract is not binding on the „key conditions of a proposed agreement between the parties“ but on issues such as „exclusivity, confidentiality, duty of care and intellectual property.“ Second, an initial commitment to non-binding commitments can lead to smoother negotiations overall. Inevitably, there is less friction in negotiating non-binding commitments than in negotiating binding commitments. If there is tension between the parties, a first interim agreement can reduce this situation by showing that both sides are always ready to continue.

In addition, the application of non-binding commitments gives the parties greater flexibility (and potential leverage) in negotiating the final agreement.