Executory contract
National Real Estate Exam glossary · Contracts
Definition
A contract in which one or more obligations remain to be performed by either party. A purchase contract between signing and closing is executory; the term describes the status of performance, not the validity of the agreement.
Executory contract in plain English
An 'executory' contract is a real, valid, signed agreement where somebody still has something left to do — the promises are made but not yet all kept. The classic example is a home sale after both sides sign but before the actual closing day: the buyer still has to pay, the seller still has to hand over the property, so obligations are outstanding. Think of it like ordering a pizza — the deal is locked in and binding, but until the pizza arrives and you pay, it's still 'in progress.' The word describes the STATUS (how far along performance is), not whether the contract is legit — it's fully enforceable the whole time.
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