Executory

In one sentence

A contract in which one or both parties still have duties to perform in the future.

Plain English

An executory contract is one where the work isn't done yet. One or both parties still have obligations to fulfill down the road. If you sign a contract to buy a house next month, that's executory until the sale closes and the deed transfers. Most contracts start out executory and become executed once the parties finish performing.

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Example

A construction company signs a contract to build a house over the next six months. The contract is executory because the builder still has to do the work and the homeowner still has to pay. Once construction finishes and payment is made, it becomes executed.

Used in a sentence

“The executory contract required the supplier to deliver goods over the next twelve months.”

Related terms

Executed

A contract in which both parties have fully performed all their obligations.

Breach

A failure to do what a contract requires, such as not paying or not delivering.

Condition Subsequent

An event that, if it occurs, ends or excuses performance under a contract.

Doctrine of Impracticability

Performance is excused when it becomes extremely difficult or expensive due to unforeseen events.

Delegation

Handing off your contract duties to someone else to perform.

Offer

A proposal to enter into a binding agreement on specific terms.

Acceptance

Agreeing to the exact terms of an offer, creating a binding contract.

Consideration

Something of value exchanged by each party to make a contract binding.

This page is a plain-English reference and is not legal advice. Laws vary by jurisdiction and change over time. For specific situations consult a licensed attorney.