Legal Definition and Related Resources of Binder

The memorandum of an agreement for insurance intended to give temporary protection pending investigation of the risk and issuance of a formal policy. See Flester v Ohio casualty Ins. Co., 307 A.2d663,269 Md. 544.

noun

• assurance
• caution money
• collateral
• collateral security
• deposit
• earnest
• escrow
• expense outlay
• gage
• guaranty
• handsel
• indemnity
• installment
• investment
• payment
• pledge
• receipt
• receipt for payment
• recognizance
• security
• stake
• token
• token payment
• Associated Concepts: binder receipt
• insurance binder
• real estate binder

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Binder in Historical Law

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See also

Blinder in Real Estate

An agreement to cover… (Read more)

What does Binder mean in American Law?

The definition of Binder in the law of the United States, as defined by the lexicographer Arthur Leff in his legal dictionary is:

When one applies for insurance, the policy itself is not ordinarily issued until the application is accepted at the insurer’s home office. But selling agents of the company are usually authorized to issue a “binder” (also called “agreement for insurance,” “binding slip,” “interim receipt,” “binding receipt,” “conditional binding receipt”), which will give insurance protection to the applicant while the company is deciding on the application. This protection usually will apply unless the applicant has been guilty of fraud, material misrepresentation, or something similar, but in some instances the coverage is more extensively conditioned.

Also, in connection with sales of real property, a memorandum of a deal, signed by either or both parties, designed to “hold” the deal until a formal contract can be signed. These are frequently not meant, by at least one of the parties, to be legally enforceable, but if the document looks like a contract, and is accompanied by consideration, the party who thought he was not legally bound may be in for a nasty surprise. Hence, explicit statement of the non-binding character of this kind of binder is strongly to be recommended.

Concept of Binder in the context of Real Property

Alternatives definitions of Binder: (1) A report issued by a title insurance company setting forth the condition of title to certain property as of a certain date, and also setting forth conditions which, if satisfied, will cause a policy of title insurance to be issued. Also called a commitment. See also: Preliminary Title Report. (2) A policy of title insurance (used primarily by investors) calling for a reduced rate for a future policy if the property is sold within a specified period.

Concept of Binder in the context of Real Property

Alternatives definitions of Binder: (1) A report issued by a title insurance company setting forth the condition of title to certain property as of a certain date, and also setting forth conditions which, if satisfied, will cause a policy of title insurance to be issued. Also called a commitment. See also: Preliminary Title Report. (2) A policy of title insurance (used primarily by investors) calling for a reduced rate for a future policy if the property is sold within a specified period.