When is a contract deemed executory?

A contract is deemed executory when at least one party has not yet fulfilled their obligations under the terms of the agreement. This means that the contract is still in progress, with some duties left to be completed by one or more of the involved parties. The critical aspect of an executory contract is that it represents a continuing obligation, where the performance is ongoing and has not yet been fully realized.

In the context of contractual agreements, once all parties have fulfilled their obligations, the contract transitions to a status of being executed, meaning that it has been fully performed and is no longer executory. Simply signing a contract does not classify it as executory; rather, it only signifies that the agreement is in effect and the obligations are expected to be met. Additionally, a court declaring a contract void indicates that the contract is no longer valid, thus removing it from the classification of executory or executed. Therefore, the defining feature of an executory contract is the existence of unfulfilled obligations by at least one party.