Forward Contract
/ˈfɔrwərd ˈkɒntrækt/
Definitions
- (n.) A bilateral agreement to buy or sell an asset at a specified future date for a price agreed upon today, often used to hedge against price fluctuations.
The company entered into a forward contract to purchase oil in six months at a fixed price.
Forms
- forward contracts
Related terms
See also
Commentary
Forward contracts are typically customized agreements distinguished from standardized futures contracts; clarity in specifying terms and counterparties is crucial in drafting.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.