Though it might not initially seem so, it wasn’t coined that way for a comedic reason. It basically just means that the contract ends, or “dies,” when either the obligation is fulfilled (meaning the house is paid off) or the property is taken through foreclosure.
The word was taken from Law French, a language that was based first on Old Norman and Anglo Norman languages, and later influenced by Parisian French and English. Its name derived from its use in the law courts of England, hence “Law French.” The phrase is elaborated on in “Commentaries on the Laws in England,” an 18th century four volume analysis of common law.
As it says in the treatise, "[I]f he doth not pay, then the Land which is put in pledge upon condition for the payment of the money, is taken from him for ever, and so dead to him upon condition, and if he doth pay the money, then the pledge is dead as to the Tenant" So always remember, one of the most integral parts of the American Dream is, in fact, a death contract.