Certified Residential Appraiser Practice Exam

Which of the following describes a executed contract?

1. A contract that has not yet been fulfilled

2. A contract that has been fully performed

3. A contract that is voidable

4. A contract that is only partially fulfilled

The correct answer is: A contract that has been fully performed

An executed contract is defined as a contract that has been fully performed by all parties involved. This means that all obligations specified in the contract have been completed, and no further actions are required from any party. Executed contracts signify the conclusion of the agreement, and the terms have been satisfied according to the provisions set forth at the time of signing. In contrast, a contract that has not yet been fulfilled would refer to an executory contract, where some or all of the obligations remain to be carried out. A voidable contract indicates that it has the potential to be enforced or canceled at the discretion of one of the parties, often due to issues such as lack of capacity or misrepresentation. Finally, a contract that is only partially fulfilled would imply that some of the terms have been met while others have not, which also does not represent an executed contract. Thus, recognizing the complete performance as necessary for a contract to be classified as executed is key to understanding this concept.