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Executed and Executory Contract

Hello Friends, Welcome to Yes Academy , About this channel :- This is a channel basically for Commerce ( 11th , 12th , CA,CS ) . Here you will get lectures of class 11th ,12th,Ca foundation law and accounts in a simple and effective way . so stay consistence with us..देखते रहे और सीखते रहें Thank you keep Watching Yes Academy Follow us on :: Instagram -   / yesacademy00   Facebook -   / ca.yesacademy   EXECUTED CONTRACT An executed contract is a legal document that has been signed off by the people necessary for it to become effective. The contract is often made between two or more people, but it can also be between a person and an entity, or two or more entities. Contracts often specify that one party will provide a service or goods to the other, and are not fully effective until all parties involved have signed. Some contracts even require the signatures be witnessed. To explore this concept, consider the following executed contract definition. Definition of Execute Noun To complete, and give effect or validity to, a legal document, decree, law, or judicial sentence. Fulfilling legal requirements of a contract or other instrument by signing or sealing. Origin 1350-1400 Late Middle English executen Types of Contracts Many types of documents and legal forms may be executed to ensure they become effective and binding. The most common documents that require execution include contracts between two or more parties, such as lease agreements, contracts for services, and sales contracts. Such documents bind the parties to carry out the terms of the agreement. Execution Date The “execution date” is the date on which a contract has been signed by all the necessary parties. This may or may not be the “effective date” of the contract, which may be specified in the body of the document. For example, Susan signs a lease agreement on April 3rd, with a move-in date of May 1st. The execution date of the lease is April 3rd, but the effective date is May 1st. Executed vs. Executory Contracts While any type of contract must be “executed” by the parties by adding their signatures to it, some people and entities refer to a contract for which the terms are to be carried out at a later date by the specific name of “executory contract.” This may create some confusion for the layperson when hearing the term “executed contract,” which may simply refer to the fact that the contract has been signed by all parties, or may refer to a signed contract for which the terms were immediately carried out. One example of this type of “executed contract” would be a contract for purchase of a major appliance. This contract is entered into, and the appliance is immediately delivered. An example of an “executory contract” may be a contract with a general contractor for the construction of a house, for which the work is to begin in four months time. The important thing to understand is that, in either case, once a contract has been signed by all the parties, it becomes legal and binding. Example of Executed Contract John has been looking at a car he wants at a car lot, debating whether to buy it. Finally deciding to make the purchase, John walks into the dealership, signs a purchase contract, pays for the car in cash, and walks out with the keys to the car. Example of Executory Contract John has been looking at a car he wants at a car lot, debating whether to buy it. Finally deciding to make the purchase, John walks into the dealership, signs a lease contract agreeing to pay a specified amount each month until the car is paid off, or he returns the car at the end of the lease. Until the car is either paid off or returned, the terms of the contract have not been fulfilled. Basics of Executing a Contract The basics of executing a contract begin with reading and understanding all of the contract’s provisions, including any fine print, and portions of the contract stated to be on another document. If the contract binds the individual or entity to a significant expense or service, it is often worth the time and expense to have an attorney review the contract before signing. Understanding Contract Terms Understanding contract terms includes understanding the difference between the contract’s execution date and effective date, if applicable, to prevent confusion in the future. Any changes to a contract agreement must be made in writing and signed by all parties before the changes take place. Because an executed contract is a legal document, each party should keep a copy and refer to it, if necessary, to fulfill their obligations completely. If one party fails to fulfill his obligations, the other party may be able to file a civil lawsuit. For example, if John fails to make the agreed lease payments on his car, the dealership could not only repossess the car, but could sue John in civil court for the remaining amount owed under the lease.