1. something that cannot be legally avoided or stopped
a binding contract/agreement
In the same way that to literally bind something means to tie together (binding your hands, for example); when something is said to be 'binding', it is considered unchangeable or something that is fixed or that you have agreed to. You can have a 'binding agreement', like a contract or a legal document, as if the people who have agreed to it are bound together by its terms. If you have a binding agreement there is usually a penalty if you decide to break it. This verb is especially used in legal or financial situations.