The term contract closure refers to the process of completing all tasks and terms that are mentioned as deliverable and outstanding onthe initial drafting of the contract, In order for a contract to be ultimately and conclusively closed, the seller must have completed allcomponents of his deliverables. The products, services, or other items that he was responsible for delivering must in fact have beencompleted in a sufficient fashion in regards to quality of product and also must have been delivered on time (or as per an extension that wasagreed upon by all parties). The buyer must have accepted the deliverables and agreed that they were delivered as promised withinthe contract. Also, the buyer must have completed the financial obligations on his end. All payments, including any finalpost-deliverable payment, must have been received by the seller, before a contract can officially be considered closed.
This term is defined in the 3rd edition of the PMBOK but not in the 4th.