First, let's clarify what a back-up contract really is. Many buyers confuse a back-up offer with a back-up contract. To qualify as a contract, it has to be signed by all parties. That means that the seller and buyer have agreed to all terms. A back-up contract is like any other contract for sale, but with one difference: It becomes effective only if it is still in place when the current contract is voided for some reason. Should that happen, the terms of the sale to the back-up buyer have already been settled; and the sale proceeds pretty much the same as if that buyer had been in the number one position all along. The back-up contract is nullified if the 
primary contract concludes successfully.
An offer is merely an offer, though it may be written on a contract form. It looks like a contract, but it is not enforceable when the seller does not also sign it. The fact that the offer exists may provide some solace to a buyer who lost out on the perfect house, but it provides no security. If the contract in place should fail, the seller then has another buyer with whom to enter negotiations; but the seller is not obligated to the buyer in any way.
Why would the parties enter into a back-up contract? A back-up contract specifies the terms of the sale. 
Negotiations are complete, and the contract can be put into place immediately. That serves the purposes of both parties--the seller, who has suffered a delay because the primary contract fell through; and the buyer, who has not yet found a home and wants the one in question. For both parties, expediency is the key issue.
The back-up contract is not re-negotiable, unless both parties agree; and that can be either a blessing or a curse, depending on your point of view. If prices are falling, the buyer is locked into a price that may not be as attractive as it was. Being locked into a contract effectively locks the buyer out of the market and into a sort of holding pattern.
The seller, on the other hand, may have learned through the appraisal that the house is worth more than previously thought, and the seller's agent may have received more attractive offers after the back-up was signed. The seller may even have decided that the timing is not right for selling at all. Both parties are obligated by the signed contract. In one sense, though, the seller is MORE obligated, because the buyer often backs out after finding another house.
Especially in the REO/foreclosure side of my business, I am often asked if the seller will "take a back-up contract." Will they take an offer? Yes, but that offer probably will stay in my file drawer. Though details of the offer may be entered on the seller's web portal, it will NOT be signed. So, NO, they will not "take" a contract. The presence of a back-up offer does not automatically give preferential status to the would-be buyer.
Some REO vendors do not even have a mechanism in place for presenting additional offers once a contract is in place. They ABSOLUTELY do not want additional paperwork forwarded to them once they are under contract.
Disclaimer: I am not a lawyer, and I don't even play one on the internet.
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