How is signing it with GPG making it any more binding?
Trusted escrow service will make sure that conditions of GPG signed contract are fulfilled before releasing bitcoins.
Seriously, what is the point of the GPG signature here? Anyone can generate a key pair under any name they like to. No legal and valid ID is required. This signature on that contract is actually meaningless unless the key/cert used for signing is issued by a government (certificate authority) and you have a way to check it's actually valid (read up on PKI, digital signatures and digital ID cards used in EU)
You are probably better off (more legally binding) using crayons to draw a toy passport, signing it as "The lord of the BlaBlah" and attaching a copy of your colorful handiwork to this "contract".
If this makes no sense, ask yourself: Who issued me the key/cert for signing stuff?
GPG signatures are only needed to let Escrow provider identify buyer and seller and authenticate the conditions of their deal.
Escrow is the key party here. He makes sure that both sides fulfill their liabilities.
Buyer and seller don't need to trust each other, they only need to trust Escrow provider.
Using trusted escrow service makes your deal even more secure than signing legal contracts, which often fail.
To find trusted escrow, you may search #bitcoin-OTC which is peer-to-peer analogue to Credit Score.
