Executory Contract

Although not all courts agree on what makes a contract “executory,” it is generally accepted that a contract is executory if there are continuing or unperformed obligations under the contract by both parties, the breach of which would constitute a material default. A non-executory contract, by contrast, is generally held to be a contract under which one or both of the parties have no remaining duties. An executory contract may be assumed or rejected by the debtor. A non-executory contract is not subject to assumption or rejection.

Bankruptcy Code § 365. See also Assumption and Assignment of Executory Contracts and Unexpired Leases, Rejection of Executory Contracts and Unexpired Leases.

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