Check Your Understanding Answers
- Define executed contract.
An executed contract is one that has been fully performed and fulfilled: neither party bears any further obligation.
- Explain executory contract and give one example.
An executory contract is one in which performance is yet to be completed. A sales contract prior to closing is an example of an executory contract.
- When all the requirements of an executory contract have taken place, the contract becomes what?
An executed contract
- How can contract interpretation issues be avoided?
Contracts should always be in writing, terms or phrases that could have more than one meaning should be clearly defined, and parties to a contract should review the contract closely before signing.
