Handfasting is a late medieval term to describe making a marriage contract. It is actually comes from Old Norse: Hand-festa, which means to strike a bargain by joining hands. The notion of a handshake, comes from the old tradition of handfasting. Even today, Let’s shake on it, can represent a vow upon which one pledges their integrity. So it was and so it is today, in the context of Celtic marriage ceremony, where handfasting still takes placed. A cloth or ribbon is bound around the bride and grooms hands. It is a mutually agreed upon act that has signified, over the years, betrothal or even actual marriage, depending upon the context.

The original practice derived from Scotland, from the middle ages to the early 17th century, when people married by consent, without the church. But it is likely to be more widespread than just in Celtic cultures. A few years back I witnessed a wedding conducted by a Native American Medicine woman who used handfasting as part of her ceremony. She said it was part of her own tradition, which suggests that handfasting might be spread further around the world than is readily apparent at first glance.
In context to Celtic wedding traditions, Sharon L Krossa, wrote an exhaustive article on handfasting, and how it has evolved into distinct eras.

In medieval times in Scotland, some friction existed around the issue of commonly marriage versus marriage sanctified by the church. Being married could be somewhat less structured and formal than it is today. Couples merely needed to exchange vows. Mutual consent was the main issue. Witnesses were not absolutely necessary, though they made it easier to prove the marriage. In Scotland and probably in other places, there was also marriage by habit. This is similar to what we call “common law” marriage today, or what Joni Mitchell means when she said, “We don’t need no paper from the city hall…” You lived together and acted as if you were married in front of society. This, in fact, meant that you were married and marriage back then was for life.

The church did not like marriages that took place outside of their view, though they recognized clandestine marriages as fact. They regarded such marriages as sinful and encouraged such couples to be married again in the church. In the end, marriage became something that the state was involved with. The Scottish wedding tradition of handfasting lasted until the 1939 Marriage act of Scotland. At that point, it was no longer accepted as legally binding.

Originally, however, handfasting was not used in formal marriage ceremonies. A.E. Anton, another person who researched this topic, wrote in 1958, “The real medieval practice was that handfasting was a synonym for betrothal, that is, for getting engaged to be married.” Handfasting was essentially a promise that the marriage would occur at some later date. It was kind of like getting an engagement ring, without the ring. The promise to be married was in some respects as good as getting married, because the couple would then be permitted (in the eyes of society) to have legitimate sex.

Apparently, from the late seventeen hundreds and into the beginning of the last century, handfasting had an entirely different meaning, perpetuated by Sir Walter Scot’s novel, The Monastery. A handfasting ceremony meant to commit oneself to a year and a day of married. Scot read some information in an obscure account of handfasting. Since that time, handfasting has been utilized as a kind of short term commitment, a time in which you can try on marriage—like shacking up together.

Contemporary Celts and Neo-pagans alike have adopted handfasting, sometimes using it as a way to commit to a year and a day scheme. Handfasting in a contemporary setting can also signify commitment for a lifetime, or eternity. Of course, in a bad marriage, a lifetime can seem like eternity, and handfasting is no more of an assurance that the marriage will survive more than any other ceremony. Sometimes, a commitment can also be renewed on multiple occasions using handfasting.

What makes it legally binding or a private spiritual commitment depends a lot upon the couple and is who officiates the marriage in what particular state. But the ceremony has been used both in gay and straight marriages. Some people who practice handfasting attempt to be traditional, while others just make it up. Regardless, the most traditional time to do handfasting commitments is in the summer, so as the ceremonies can be held outside in a natural setting. Even in a traditional context, handfasting can be a great tradition to incorporate in a Celtic marriage.