What is an executory contract?
A) a contract that cannot be discharged under Chapter 13
B) a contract that the debtor is obliged to perform despite filing for bankruptcy
C) an agreement between several creditors and a single debtor, dividing the debtor's property
D) a contract that has not been fully performed

Question

Quizplus · Accepted Answer

An executory contract is a contract that has not been fully performed by both parties. In the context of bankruptcy, it refers to a contract where both parties still have duties to perform. The trustee in bankruptcy may choose to assume or reject an executory contract within a certain timeframe. If it is rejected, the debtor is no longer bound by the contract.

What Is an Executory Contract