A debtor may assume or reject contracts where material performance remains due on both sides.

Rejection is a breach deemed to occur immediately before the filing, giving the counterparty a general unsecured claim for damages. It does not rescind the contract or terminate rights that have vested.

Assumption requires cure of defaults, compensation for pecuniary loss, and adequate assurance of future performance.

Assignment is permitted notwithstanding anti-assignment clauses, on adequate assurance from the assignee — subject to exceptions where applicable law excuses the counterparty from accepting performance from another, which covers personal services and certain non-exclusive intellectual property licenses.

Ipso facto clauses terminating a contract on bankruptcy are generally unenforceable.

Intellectual property licenses. A licensee under a rejected license may elect to retain its rights for the term, continuing to pay royalties and forgoing other remedies. Trademark licensees are protected because rejection is a breach rather than a rescission.

Timing. Non-residential real property leases must be assumed or rejected within a statutory period; other contracts may be decided at confirmation.

Post-petition performance. The counterparty must continue performing pending the decision and has an administrative claim for the value provided.