Oregon 30-Hour Real Estate Law Practice Test

What type of contract is characterized by one or more terms still needing to be fulfilled?

1. Void contract

2. Completed contract

3. Unilateral contract

4. Executory contract

The correct answer is: Executory contract

A contract characterized by one or more terms still needing to be fulfilled is referred to as an executory contract. In an executory contract, at least one party has an obligation to perform a duty in the future, indicating that the contract has not yet been fully executed. This distinguishes it from other contract types where either performance has been fully rendered or the contract may be unenforceable. For instance, in a real estate context, if a buyer agrees to purchase a house but the sale will not close for another month, the purchase contract remains executory until all conditions are met and the transfer of ownership occurs. Thus, it captures the essence of ongoing obligations yet to be fulfilled, reflecting the nature of many agreements in real estate transactions.