A completed contract is called a discharged contract. When the parties finished it the ordinary way, by each doing what they promised, lawyers also call it a fully executed contract, or say the contract was discharged by performance. The opposite term is executory, which describes a contract that still has unfinished obligations on one or both sides.
The Terms People Actually Use
Three words come up over and over, and they overlap enough to confuse people.
- Discharged. The broadest term. A contract is discharged when the legal relationship between the parties ends and their obligations are extinguished. Discharge can happen through performance, mutual agreement, impossibility, breach, or operation of law.
- Performed (or discharged by performance). The most common form of discharge. When both sides fulfill every promise in the agreement, the contract is discharged by performance.
- Fully executed. The word “execute” does double duty. Signing a contract is sometimes called executing it, but a “fully executed” contract usually means one where all parties have carried out their obligations. The contrast is an “executory” contract, which still has duties outstanding.
So the short answer: if someone asks what to call a contract that’s finished, “discharged” is the technically correct umbrella term, and “fully executed” or “discharged by performance” is the right phrasing when both sides actually did what they promised.
Full Performance and Substantial Performance
Most contracts end through performance, but not every performance is identical.
Full performance, sometimes called complete performance, is the cleanest ending. Every obligation has been met exactly as specified, with no deviation in quality, timing, or scope. Once a party fully performs, there is no remaining liability under the contract and no valid breach claim for the work covered by that agreement.
Substantial performance is the doctrine that handles real-world near-misses. If a party has fulfilled the material elements of the contract but fallen short on minor, non-material details, they’ve done enough to earn payment. The classic example is a construction contract where the builder completed a house to specification but used a different brand of pipe that was functionally equivalent to what the contract required. The court held the contractor had substantially performed and the homeowner owed payment, minus the difference in value caused by the substitution.1Legal Information Institute. Substantial Performance
Substantial performance only covers immaterial deviations. If the shortfall goes to the heart of the bargain, it’s a breach, not substantial performance. Even when substantial performance is recognized, the other party can usually recover an offset for whatever minor deficiencies remain.
Other Ways a Contract Can End
Performance is the usual exit, but it isn’t the only one. A contract can also be discharged in several other ways, and the label still applies: once discharged, the obligations are gone.
By mutual agreement. The parties who made the contract can agree to end or replace it. Rescission cancels the contract entirely and restores each side to its pre-contract position; it works best when neither side has fully performed yet.2Legal Information Institute. Rescission Novation extinguishes the original contract and replaces it with a new one, often substituting a new party for one of the originals, with everyone’s consent.3Legal Information Institute. Novation Accord and satisfaction is an agreement that one side will accept a different performance than what was originally promised; once that substitute performance happens, the original obligation is discharged.
By impossibility or related doctrines. Events outside anyone’s control can discharge a contract. Classic impossibility covers the death or serious illness of someone whose personal services were required, destruction of something essential to performance, and a new law or government order that makes performance illegal.4Business Law I – Interactive. Discharge by Operation of Law when Performance Becomes Very Difficult Related doctrines of impracticability and frustration of purpose cover narrower situations where performance is still technically possible but the deal has become radically different from what the parties anticipated.5Legal Information Institute. Frustration of Purpose
By breach. If one party commits a material breach, meaning a failure that goes to the substance of the agreement, the non-breaching party can treat the contract as discharged and sue for damages. A minor breach gives the injured party a claim for the shortfall but doesn’t excuse their own performance.
By operation of law. Bankruptcy is the main example. A bankruptcy discharge releases a debtor from personal liability for certain debts and permanently bars creditors from collection efforts.6United States Courts. Discharge in Bankruptcy – Bankruptcy Basics When a contractual obligation is included, it’s effectively extinguished as far as the debtor’s personal liability is concerned.
What Can Survive a Completed Contract
“Discharged” doesn’t always mean every single obligation is gone. Many contracts include survival clauses that keep specific provisions alive after the rest of the agreement ends. The common survivors:
- Confidentiality. Duties to protect sensitive information shared during the contract. These often survive for years, or indefinitely, because the information doesn’t become less sensitive once the business relationship ends.
- Indemnification. Provisions requiring one party to compensate the other for losses tied to events that happened during the contract period, even if the claim surfaces later.
- Non-compete and non-solicitation. Restrictions on competing or on poaching employees and customers for a defined period after the contract ends.
- Dispute resolution. Arbitration clauses, choice-of-law provisions, and forum selection clauses that govern any later disagreement about the contract itself.
- Payment obligations. Amounts already owed for work performed or goods delivered remain due.
Courts generally look at the parties’ intent when deciding whether a provision survives. Some obligations, like confidentiality, can survive by implication even without an express clause. Relying on implied survival is risky, though. If a protection matters to you after the contract ends, say so in the agreement and specify how long it lasts.
How to Document That a Contract Is Complete
A verbal “we’re done here” rarely holds up if someone later says the work wasn’t finished. A few documents formalize the end of a contract.
A certificate of completion or final acceptance letter is the most direct option. One party formally acknowledges that the other has met all contractual obligations, creating a written record of discharge by performance. In construction, a property owner may also file a notice of completion with the local recorder’s office; filing is voluntary, but in states that recognize it, the filing starts a shortened deadline for subcontractors and suppliers to assert lien claims.
Final lien waivers matter in construction and services contracts. A final unconditional waiver confirms the contractor has received full payment and gives up the right to place a lien on the property. A final conditional waiver does the same but only takes effect once the specified payment clears. Getting these signed when final payment changes hands prevents one of the most common post-completion disputes.
For any significant contract, keeping the fully signed agreement, every amendment, proof of performance (inspection reports, delivery receipts, completion certificates), and final payment records in one file is the simplest insurance. If anyone later argues the contract wasn’t properly completed, that documentation is your first line of defense.