Contracts
In Michigan, a real estate contract becomes 'executory' when:
ABoth parties have fully performed all obligations
BThe contract has been signed by both parties but not yet fully performed✓ Correct
CAn executor of an estate signs on behalf of a deceased party
DThe closing is scheduled
Explanation
An executory contract is one that has been formed (signed by all parties) but not yet fully performed. A Michigan purchase agreement from signing to closing is executory—both parties have obligations remaining to be performed.
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Key Terms to Know
Purchase Agreement
A legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
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