A forward contract is an agreement between two parties to buy or sell an asset at a predetermined future date and price. It is a type of derivative instrument or contract used in the commodities, foreign exchange, and other markets. The parties involved in a forward contract agree to buy or sell an asset at a certain price on a future date. The price is agreed upon at the time of entering into the contract and is usually based on the current market price. The contract is not traded on any exchange and is not standardized.