Two parties enter into a contract for the delivery of imported specialty goods. Until the goods are delivered and paid for, these parties have an executory contract.
A contract that has not been fully performed or fully executed is said to be executory. It is a contract when both parties have significant performance obligations still to fulfill. An obligation to pay money, especially one that is significant, typically does not render a contract enforceable.
If failing to fulfill a duty might lead to a breach of the contract, it is considered to be material. A contract is not executory if just one party has completed all of its obligations under it.
According to US bankruptcy law, a "executtory contract" is one in which ongoing obligations are present on both parties at the time of the bankruptcy filing. Both the debtor and the counterparty must still perform going forward.
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