A purchase agreement includes a contingency allowing a buyer to terminate if unable to sell their current home. This agreement is classified as what type?

A purchase agreement that includes a contingency allowing a buyer to terminate if they're unable to sell their current home is classified as an executory contract. This classification is accurate because an executory contract is one in which some future act or obligation remains to be performed by one or more parties involved. In this case, the buyer's obligation to proceed with the purchase of the new home depends on their ability to sell their current property. This means that until the buyer either sells their current home or chooses to terminate the agreement based on that condition, the contract remains in a state of execution, meaning it has not yet been fully performed.

In contrast, an executed contract would mean that all parties have completed their respective obligations, which is not the case here due to the contingency. An option contract gives one party the right to purchase or lease a property at a later date but does not typically involve contingencies related to the sale of other properties. Lastly, a unilateral contract involves one party making a promise in exchange for a performance from another party, but since this purchase agreement involves mutual obligations conditional on future events, it does not fit this definition either. Hence, calling it an executory contract accurately reflects its contingent nature and the partial performance status of the underlying obligations.