II. Definition of Executory Contract

• Jurisdiction: North Carolina

II. DEFINITION OF EXECUTORY CONTRACT

A. No Code Definition of "Executory Contract"

The Bankruptcy Code intentionally does not define the term "executory contract." However, the legislative history of the Code notes that "it generally includes contracts on which performance remains due to some extent on both sides." H.R. Rep. No. 95-595, at 347 (1977); S. Rep. No. 95-989, at 58 (1978).

B. The Countryman Definition

The definition of "executory contract" most commonly used by courts is the one developed by Professor Vern Countryman. Professor Countryman states that an executory contract is:

a contract under which the obligation of both the bankrupt [now debtor] and the other party to the contract are so far unperformed that the failure of either to complete performance would constitute a material breach excusing performance of the other.

Vern Countryman, Executory Contracts in Bankruptcy: Part 1, 57 Minn. L. Rev. 439, 460 (1973).

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