A contract under which unperformed obligations remain on both sides, or where both parties have continuing obligations to perform. For example, most leases or contracts for the sale of goods where the goods have not been delivered by the seller and the buyer has not paid, are executory contracts. A contract is not executory if the goods have been delivered but the buyer has yet to pay. Executory contracts are given special treatment under the Bankruptcy Code. The debtor has the choice to continue or reject the agreement.

For further information, see Practice Notes, Executory Contracts and Leases: Overview and Executory Contracts and Leases in Bankruptcy: Strategies for Non-Debtors.