In California real estate transactions, what is the legal distinction between an executed contract and an executory contract?
Correct Answer
A) An executed contract has been fully performed by all parties, while an executory contract has remaining obligations yet to be fulfilled
Under California contract law, an executed contract is one where all parties have fully performed their obligations. An executory contract is one where one or more obligations remain to be fulfilled. A typical California purchase agreement is executory from signing until closing, when it becomes fully executed.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
Equitable title is the buyer's interest in a property after a purchase contract is signed but before closing, giving the buyer the right to acquire legal title in the future. The seller retains legal title until the deed is delivered at closing.
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