A contract that has not yet been completely performed by either party, in accordance with its terms. This will arise where, for example, the parties have agreed to perform their obligations at a future point in time (such as under a letter of credit, a derivative contract or a repurchase agreement).

Except in very strong and exceptional cases, an executory contract can be prevented from coming into existence where it is expressed to be "subject to contract" because those words are taken to mean that until a further contract has been executed neither party is to owe the other any contractual obligation (Rugby Group Ltd v Proforce Recruit Ltd [2005] EWHC 70 (QB)).

For information on executory contracts in the context of netting under a terminated finance transaction, see Practice note, Netting.