What is an Executed Contract?
An executed contract is a signed contract that establishes a contractual relationship between two or more parties. Once the contract is fully signed, each party agrees to uphold the legal obligations they agreed on within the written agreement.
While an executed contract can refer to an agreement between two or more parties with signatures, it can also refer to a contract that has not only been agreed upon but has also been fulfilled. Both definitions are legally valid and can be used in either context.
Understanding Execution Date
The execution date of an executed contract is the date that all parties placed their signature on the hard copy of the agreement. The execution date is not to be confused with the effective date, which indicates the time in which the agreement within the contract officially goes into effect.
To put this term into perspective, imagine you are signing a residential lease agreement on a new home in your town. When you arrive at the real estate agent’s office, you intend to sign the contract and find out what your move-in date will be. Once you sign the contract, it is considered an executed contract since everyone agrees on the terms and you intend to inhabit the unit.
However, the effective date does not occur until your move-in date. This is the date that all the terms of your agreement officially go into effect. In other words, this is when your agreement becomes officially effective.
Check out this article to learn more about execution dates.
Executed Contract Examples
Executed contracts are legal agreements that have been agreed upon and signed for by all parties to the contract. Here are some examples of what an executed contract might look like:
Executed Sales Contract
Sarah decides she wants to purchase a new car, so she goes to a car dealership to check out their inventory. A few hours later, she finds a Kia Soul that has everything she wants in a car and agrees to buy it for cash. The car dealership draws up a sale contract for the car that indicates how much Sarah will pay and what warranties the dealership offers. Then, the salesman and Sarah each sign the contract. This would be considered an executed contract since both parties to the agreement agreed and signed on the deal.
Execution Date vs. Effective Date
Benjamin is a fresh grad student who has just found his first apartment. When he goes to the leasing office to get the keys, he learns that he must first sign a lease agreement before he can take control of the unit. He also learns that he won’t be able to move in for two weeks, which allows the apartment management team to prepare the apartment for his move-in date. Benjamin signs his lease agreement on May 1 st , which places his move-in date on May 15 th . May 1 st is the execution date which May 15 th is the effective date since that is when Benjamin moves in.
Examples of How to Draft an Executed Contract
Drafting a contract is an important job. General contracts and other legal agreements set the groundwork for relationships and define expectations for the duration of the agreement.
This means that when you draft a contract , you must pay close attention to detail to make sure the best interest of all parties is included in the agreement. If you can spare the expense, the best way to ensure your contract is legally sound is to collaborate with a contract lawyer to create the document for you.
However, you can draft a contract yourself if you would like. It’s helpful to keep a running list of the terms and conditions that you discuss with the other party before you write the document.
Formatting a contract is easier than you might think – you don’t even need word processing software to get the job done. The simplest and most effective way to write a contract is to use a contract template. These outlines can be found online or through a local lawyer’s office.
Here is an article where you can find out more about executed contracts.
What Does it Mean to Have a Fully Executed Contract?
When you have a fully executed contract, it means that you have entered into a legally binding agreement. You agree that all the terms within the contract are satisfactory to you, and your signature solidifies that.
Other parties to your agreement also agree that they have no objections to any of the terms and find no issues in upholding the agreement.
From a legal standpoint, when you have a fully executed contract, it means that there is legal recourse if any of the requirements within the agreement are violated. Each signing party is given specific rights when the contract goes into effect. If anyone doesn’t follow what they originally agreed to, it could spell trouble for them.
The bottom line is that once a contract is signed, it’s called an executed contract. Once the contract is executed, all signors are officially obligated to fulfill their roles as agreed in the contract.
If any changes must be made in the contract after the execution date, the modifications can only be made if all parties agree to the new terms. After the changes are agreed upon, an addendum to the contract can be added to officially modify the original terms. All signatures on the original executed contract must be present on the addendum for it to be valid.
Learn more about what it means to have an executed contract by reading this article .
Executed Contract vs. Executory Contract
Even though their names sound similar, an executed contract and executory contract are not the same things. An executed contract refers to a written legal agreement that has been agreed upon and signed by all parties to the contract.
An executory contract, on the other hand, is a contract that has been agreed upon and signed but is still in progress. There may be outstanding work that needs to be completed.
When it comes to bankruptcy, an executory contract takes on a different definition. If a bankruptcy judge declares that an executory contract exists, it indicates that both parties of the bankruptcy must still complete their agreement. This might mean that the person filing bankruptcy must continue making car payments until the note is paid off or that a person’s mortgage must be satisfied before they can own their home, regardless of the bankruptcy filing.
Get the scoop on executory contracts and read this article .
Get Help with Executed Contracts
Executed contracts are a great way for all parties to an agreement to protect themselves and ensure legal recourse is possible if anyone doesn’t hold up their end of the bargain. Getting help from a professional ensures that all bases are covered for the contract to be admissible in court.
If you need help with an executed contract, you don’t have to face it alone. Contract lawyers are well-versed in the world of contracts and can help you with any questions or concerns that you might have. Post a project on ContractsCounsel to get in touch with contract lawyers who specialize in executed contracts.