What term refers to a contract that has not yet been fully performed?

What term refers to a contract that has not yet been fully performed?

• A. Agency by Estoppel
• B. Executory Contract
• C. Mortgage Subordination Agreement
• D. Non-Recourse Clause

Answer: (B)

The term is an executory contract. An executory contract is one where some obligations remain to be performed by one or both parties. In real estate, a sales contract is typically executory from signing until closing when the purchase price is paid and the deed is delivered, so performances are still owed. An executed contract, by contrast, is fully performed. The other terms describe different concepts: Agency by estoppel involves liability for an agent’s actions, a Mortgage Subordination Agreement changes lien priority, and a Non-Recourse Clause limits the lender’s recovery to the collateral.

The term is an executory contract. An executory contract is one where some obligations remain to be performed by one or both parties. In real estate, a sales contract is typically executory from signing until closing when the purchase price is paid and the deed is delivered, so performances are still owed. An executed contract, by contrast, is fully performed. The other terms describe different concepts: Agency by estoppel involves liability for an agent’s actions, a Mortgage Subordination Agreement changes lien priority, and a Non-Recourse Clause limits the lender’s recovery to the collateral.