What type of contract describes terms that remain incomplete?

Study for the Arizona Salesperson Test with flashcards and multiple-choice questions. Each question is paired with helpful hints and detailed explanations. Get ready to ace your exam!

An executory contract is one where some performance or terms are yet to be completed by one or more parties involved. This means that while the contract has been agreed upon, it has not been fully executed; that is, certain obligations have not yet been fulfilled. In this scenario, the terms of the contract are still in the process of being carried out, indicating that both the parties are engaged in ongoing duties that need to be completed for the contract to be fully performed.

This concept is crucial in real estate transactions since many agreements, such as purchase contracts, often have contingencies or actions that must occur before the sale can be finalized. For example, a buyer may need to obtain financing or a seller may need to complete repairs, making the contract executory until those conditions are satisfied.

Understanding the nature of executory contracts helps parties recognize their obligations and timelines, ensuring that they take the necessary actions to move towards complete execution of the agreement.

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