What is an executory contract?

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An executory contract is a contract that has not been fully performed by both parties. In the context of bankruptcy, it refers to contracts that are still ongoing and require both parties to fulfill their obligations. In a bankruptcy case, the debtor has the option to assume or reject the executory contract. If the debtor assumes the contract, they agree to continue performing under the terms of the contract. If they reject the contract, they are relieved of any obligation to perform and can seek other alternatives.

What Is an Executory Contract