Fully Executed Contract

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The term “fully executed” can apply to several different situations. First, when a contract is said to be “fully executed,” it means that all parties to the agreement have fully performed their obligations, or that all of the terms and conditions of the contract have been fulfilled in their entirety.

For example, consider a transaction in which an owner of real estate agrees to sell a commercial building. The parties enter into a real estate sales agreement. At the closing, the parties sign all of the necessary paperwork. The buyer transfers the agreed amount of money to the seller, and the seller transfers ownership and possession of the property to the buyer. The contract is now deemed to be fully executed.

“Fully executed” can also be used to reference the fact that all parties to the contract have signed it. By contrast, after only one party had signed the contract, it would not yet be fully executed. While each party certainly must sign the contract, sometimes more is required. For example, any handwritten changes must be initiated. This procedure prevents a party from later making a handwritten change and claiming that the parties acknowledged it with their signatures at the end of the document. Some contracts call for page by page initialing to signify that each page has been acknowledged, read, and understood.


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