Legal Definitions - executory limitation

An executory limitation is a type of restriction that automatically ends an estate and transfers it to a third party upon the occurrence of a specified event. This type of limitation is not recognized in common law and can only be created as a shifting use or an executory devise. It is a condition subsequent in favor of someone other than the transferor.

• A conveys a piece of land to B until C graduates from college, at which point the land will automatically transfer to D. This is an example of an executory limitation because the estate will end and transfer to D upon the occurrence of C's graduation.
• A lease agreement includes a provision that terminates the lease if the lessee defaults on their payments. This is also an example of an executory limitation because the estate (the lease) will end and transfer back to the lessor upon the occurrence of the default.

These examples illustrate how an executory limitation can cause an estate to automatically end and transfer to a third party upon the occurrence of a specified event, which is different from a regular limitation that restricts the extent of an estate.