Question

Francie drives into Gage’s Auto Service and asks Hong, a Gage’s employee, to replace a tire on Francie’s car.

After Hong replaces the tire, but before Francie pays for it, any contract between Francie and Gage’s is:

a) executed.
b) executory.
c) void.
d) unenforceable.

Answer 1

Option B.

Step-by-step explanation:

An executory contract is one in which unperformed obligations remain on both sides, or one where both parties in a contract have continuing obligations to perform. Therefore is a contract that is made by two parties in which the terms in the contract are to be fulfilled at a later date. The contract shows that both sides still have duties to perform before it will become executed.

For example, contracts for the sale of goods in which the goods have not been delivered by the seller and the buyer has not paid, are executory contracts.

Therefore, as we can see from the scenario above, the contract is executory because, although Hong has replaced the tire, Francie is yet to pay, therefore, Francie has not performed her pert in the contract, making it an executory contract.