What defines an executed contract?

An executed contract is defined as one in which all the parties involved have fulfilled their respective promises and obligations as outlined in the agreement. This means that every term specified in the contract has been completed, which effectively brings the contract to a conclusion. The contract transforms from a potential agreement into a finalized one once all parties have performed their duties as stipulated.

In contrast, when a contract is still in negotiation, it has not yet reached the point of execution because not all terms are agreed upon. A solely verbal agreement does not meet the requirements of an executed contract unless all terms are agreed upon and acted upon—this is often why written contracts are preferred for clarity and enforceability. A contract that lacks consideration is also not valid or enforceable, as consideration is a fundamental element necessary for a contract to be legally binding. Thus, fulfillment of all promises is what distinguishes an executed contract.