What is an executory contract?

An executory contract is a legally binding agreement that has yet to be fully carried out. In Colorado, a contract becomes executory when both parties involved enter into an agreement and at least one of them has yet to meet their responsibilities outlined in the contract. Under Colorado contract law, an executory contract can have many different definitions and interpretations. Generally, an executory contract is a legally binding agreement between two or more parties where at least one party has yet to fulfill a certain obligation or promise in order for the contract to be concluded. When the terms of an executory contract are not met, the aggrieved party (the one who suffered a loss due to the other party’s breach) may seek damages. The aggrieved party may also be able to sue for a breach of contract. Such cases, however, must be brought to court in order to be upheld. Executory contracts are ubiquitous in various types of transactions. For instance, a common example of an executory contract is a lease agreement. When one party agrees to rent a piece of property to another party, the latter must make the agreed upon payments each month in order for the contract to hold, otherwise the contract is considered breached.

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What is an executory contract?

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