Executed Contract
Definition and meaning of Executed Contract in real estate.
An executed contract is a legal agreement where all parties have fully performed their obligations and signed the document. In real estate, this term refers to a transaction that has successfully closed, with ownership transferred to the buyer and funds delivered to the seller.
In more detail
It is common to confuse an "executory" contract with an "executed" contract. When a buyer and seller sign a purchase agreement, the contract is executory because tasks like home inspections, appraisals, and financing approvals must still be completed. Once all contingencies are met, the closing occurs, the deed is recorded, and the money changes hands.
At that precise moment, the contract becomes fully executed. Once executed, neither party has outstanding duties, and the contract is complete.
Key facts
| Category | Legal, Titles & Closing |
|---|---|
| Status | Fully completed, with no outstanding duties remaining for either party |
| Also known as | Fully performed contract |
| Applies to | Deeds, leases, and purchase agreements once all terms are met |
A buyer and seller attend the closing meeting, sign the final paperwork, wire the purchase funds, and hand over the keys, officially making the purchase agreement an executed contract.
Frequently asked questions
What is the difference between an executed contract and a signed contract?
A signed contract may still have terms that need to be performed, which is called an executory contract. An executed contract means all signed terms have been fully completed.
Can an executed contract be canceled?
Because all obligations have already been completed and the transaction is closed, an executed contract cannot be canceled; any future changes require a new agreement.