What defines a divisible contract?

A divisible contract is characterized by its structure, which enables it to be divided into separate units or parts, each of which can be performed and compensated for independently. This means that the performance of one part does not depend on the completion of other parts. In essence, these contracts allow for partial fulfillment; if one segment is completed, the party may be entitled to payment for that segment, regardless of whether other parts have been performed.

This definition underscores the nature of divisible contracts, as they facilitate completion and payment for distinct parts without necessitating the performance of the entire agreement. Consequently, the ability to treat various units as distinct allows for flexibility in performance and is often applied in contracts involving the delivery of goods or services that can be segmented.

Other options may touch upon contract elements and arrangements but do not capture the essence of divisibility. For example, requiring performance in full before any payment describes a different type of arrangement, while performance at the same time relates to a simultaneous performance structure, and unenforceability addresses a contract's legal standing rather than its divisibility. Thus, the focus on treating various units as distinct is key to understanding what defines a divisible contract.