Certified Residential Appraiser Practice Exam

Which type of contract is fully performed with all promises fulfilled?

1. Executed contract

2. Implied contract

3. Voidable contract

4. Bilateral contract

The correct answer is: Executed contract

An executed contract refers to a legal agreement whereby all parties involved have fulfilled their promises and obligations as stipulated in the contract. This means that all terms have been met, and the contract is considered complete. In real estate and appraisal contexts, an executed contract indicates that both the buyer and seller have completed their agreed actions, such as payment and transfer of property, leaving no outstanding duties to be performed. In contrast, an implied contract is based on the actions or conduct of the parties rather than written or spoken words, therefore lacking the explicit fulfillment status of an executed contract. A voidable contract involves agreements that may be enforced or rescinded at the option of one party due to certain circumstances, meaning all terms might not yet be fulfilled. A bilateral contract consists of mutual promises between two parties, but it does not indicate whether those promises have been completely performed. Thus, the nature of an executed contract is precisely aligned with the concept of complete fulfillment of all obligations involved.