What Is an Executed Contract?
In contract law, the term executed contract refers to an agreement that has been fully performed by all parties involved. Unlike agreements that are still in progress, an executed contract means both sides have carried out their promises, making the contract complete.
Simple Definition
An executed contract is a legally binding agreement where all parties have fulfilled their obligations as stated in the contract. Once completed, the contract has no outstanding duties left for either party.
Real-Life Examples of Executed Contracts
- Car purchase: After payment is made and the vehicle is delivered, the contract is executed.
- House sale: When the buyer pays and the seller transfers ownership, the contract is complete.
- Employment contract: A short-term project contract becomes executed once the work is finished and payment is made.
Importance of the Concept
Executed contracts are important because they represent finality in legal agreements. They provide certainty that obligations have been met and reduce the possibility of disputes. Understanding when a contract is executed helps businesses and individuals know when legal responsibilities are officially complete.
Comparison: Executed vs Executory Contract
Executed Contract: All obligations are completed.
Executory Contract: Some or all obligations are still pending.
| Feature | Executed Contract | Executory Contract |
|---|---|---|
| Status | Completed | Ongoing or pending |
| Example | Paid and delivered | Mortgage payments over time |
| Legal Effect | Finalized | Still enforceable until finished |
FAQ
1. What does it mean when a contract is executed?
It means both parties have fully performed their obligations under the agreement.
2. Is an executed contract legally enforceable?
Yes, but since it is already complete, enforcement usually involves resolving disputes over performance quality.
3. How is an executed contract different from an executory contract?
An executed contract is complete, while an executory contract still has duties to be performed.
4. Can an executed contract still be challenged?
Yes, challenges can arise if one party claims the contract was invalid or improperly executed.
5. Are executed contracts common?
Yes, most everyday transactions, such as buying goods, result in executed contracts.
Closing
An executed contract represents a completed legal relationship where both parties have fulfilled their promises. By knowing the difference between executed and executory contracts, individuals and businesses can better understand their rights and obligations.
