Are electronic signatures valid?

Yes. Electronic signatures are enforceable under the federal ESIGN Act and applicable state laws when intent, consent, attribution, and retention are satisfied (see ESIGN Act, 15 U.S.C. §7001). Ensure the signature method provides a reliable audit trail.

Do I need a notary or witness?

Most commercial forward contracts do not require notarization, but certain jurisdictions or ancillary instruments (e.g., deeds) may. Confirm local requirements before relying on a notary or witness for enforceability.

Can I use remote online notarization (RON)?

RON availability varies by state. Over 45 states permit permanent RON; check the applicable state notary commission rules and retain required audio-video records when used.

What if the price formula is disputed?

Include a clear reference source, publication time, rounding rules, and dispute resolution procedures. Absent clarity, parties face calculation disputes that can lead to arbitration or litigation.

How should I handle margin or collateral?

Specify initial margin, variation margin triggers, permitted collateral types, valuation timing, and remedies for failure to post to reduce credit exposure and liquidation risk.

How long should I retain contract records?

Retain executed contracts for the contract term plus at least 3 years; follow IRS guidance (IRC §6501(a)) and industry-specific retention rules such as HIPAA (45 CFR §164.530(j)) for healthcare.

Electronic Signature
Templates
Legal
Forward Sales Contract

Forward Sales Contract

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FORWARD SALES CONTRACT

This Forward Sales Contract (the "Contract") is made and entered into as of Effective Date: by and between Seller Name: , a with principal place of business at ; and Buyer Name: , a with principal place of business at . Seller and Buyer are each a Party and together the Parties.

RECITALS

WHEREAS, Seller produces, owns or controls the commodity described as (the "Product"); and

WHEREAS, Buyer desires to purchase and Seller desires to sell the Product on the terms and at the prices set forth in this Contract for delivery in the period commencing and ending ; and

WHEREAS, the Parties wish to set forth the terms under which Seller will deliver and Buyer will pay for the Product at a future date at the agreed price or price formula.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the Parties agree as follows:

1. DEFINITIONS

1.1 Definitions. In addition to terms defined elsewhere in this Contract, the following definitions apply: "Business Day" means a day on which commercial banks are open for business in the jurisdiction of the Governing Law; "Contract Price" means the price payable for the Product as set out in Section 3; "Delivery Date" or "Delivery Period" means the specific dates or period for physical delivery as set out in the Delivery Schedule; "Product" means the commodity described in the recitals and further specified in Section 2. For purposes of quantity and quality the Product shall be measured and tested in accordance with customary industry standards described in this Contract.

2. SALE AND PURCHASE

2.1 Sale. Subject to the terms and conditions of this Contract, Seller agrees to sell and deliver to Buyer, and Buyer agrees to purchase and accept, the Contract Quantity of the Product during the Delivery Period in accordance with the Delivery Schedule.

Delivery Schedule

2.2 Quantity and Tolerance. The Contract Quantity is with a permitted tolerance of .

3. PRICE AND PAYMENT

3.1 Contract Price. The Contract Price shall be: per in , except as otherwise agreed in writing or determined pursuant to the price formula below.

Price Formula / Adjustments (if applicable)

3.2 Payment Terms. Buyer shall pay amounts due within days after receipt of Seller's invoice unless otherwise agreed. All payments shall be made in immediately available funds to the account designated by Seller.

Banking and Invoicing Details

4. DELIVERY, TITLE AND RISK

4.1 Delivery Terms. Delivery shall be made at in accordance with the Delivery Schedule. Unless otherwise expressly provided, delivery shall be EXW, FCA, or other specified commercial term as agreed in writing.

4.2 Title and Risk of Loss. Title to and risk of loss for the Product shall pass from Seller to Buyer at the time and place specified by the agreed delivery term. Transfer of title and risk shall be subject to Seller's right to suspend deliveries for nonpayment in accordance with this Contract.

5. INSPECTION AND CLAIMS

5.1 Inspection. Buyer shall inspect the Product within Business Days after delivery and shall give written notice of any claim for shortage, damage or nonconformity. Failure to provide timely written notice shall constitute acceptance of the Product.

6. REPRESENTATIONS AND WARRANTIES

6.1 Mutual Representations. Each Party represents and warrants that it is duly organized, validly existing and in good standing under the laws of its jurisdiction of formation, has full power and authority to enter into and perform this Contract, and that the execution and delivery of this Contract has been duly authorized by all necessary corporate or organizational action.

6.2 Seller's Warranties. Seller warrants that, at the time of delivery, the Product will conform to the quality and specifications set forth in this Contract, will be free from liens and encumbrances, and will comply with applicable laws. Seller's sole obligation for breach of the foregoing shall be limited to repair or replacement of the nonconforming Product or refund of the purchase price for such Product, at Seller's election, subject to Buyer's rights under Section 5.

7. DEFAULT, REMEDIES AND TERMINATION

7.1 Events of Default. Each of the following shall constitute an event of default: (a) failure to pay any undisputed amount when due; (b) failure to deliver or accept Product in material breach of the Delivery Schedule; (c) insolvency, appointment of receiver, or commencement of proceedings for liquidation by or against a Party.

7.2 Remedies. Upon an event of default the non-defaulting Party may pursue any remedies available at law or in equity, including specific performance, damages and termination. Prior to termination the non-defaulting Party shall provide written notice and a cure period of Business Days, except where such remedy would be futile.

8. FORCE MAJEURE

8.1 Excused Performance. Neither Party shall be liable for failure or delay in performance to the extent caused by Force Majeure events beyond a Party's reasonable control, including acts of God, war, strikes, embargoes, governmental action, or natural disaster (a "Force Majeure Event"). The affected Party shall use commercially reasonable efforts to mitigate the effects of the Force Majeure Event.

8.2 Notice. The Party claiming relief shall give the other Party prompt written notice of the occurrence of the Force Majeure Event and an estimate of its expected duration and effect, provided that failure to give such notice shall not invalidate the claim if the Party demonstrates reasonable cause for the delay.

9. CONFIDENTIALITY

9.1 Confidential Information. Each Party shall hold in confidence and not disclose to any third party any Confidential Information of the other Party disclosed in connection with this Contract, except as required by law or with the prior written consent of the disclosing Party. Confidential Information does not include information that is publicly available other than by breach of this Contract.

10. ASSIGNMENT

10.1 Assignment. Neither Party may assign or transfer its rights or obligations under this Contract without the prior written consent of the other Party, which consent shall not be unreasonably withheld; provided, however, that either Party may assign this Contract in connection with a sale of substantially all of its assets or a merger without such consent upon written notice to the other Party.

11. NOTICES

11.1 Form and Delivery. All notices, invoices and communications required or permitted under this Contract shall be in writing and shall be delivered by hand, nationally recognized overnight courier, certified mail, or email (with confirmation of receipt) to the addresses set out below or to such other address as either Party may designate by written notice to the other Party.

Seller Notice Address Seller Notice Contact Buyer Notice Address Buyer Notice Contact

12. GOVERNING LAW; DISPUTE RESOLUTION

12.1 Governing Law. This Contract shall be governed by and construed in accordance with the laws of , without regard to its conflict of laws principles.

12.2 Dispute Resolution. The Parties shall attempt in good faith to resolve any dispute arising under or in connection with this Contract by negotiation between senior representatives. If unresolved within 30 days, either Party may seek any remedy available under applicable law. The Parties agree that, notwithstanding the foregoing, either Party may seek injunctive or other equitable relief in any court of competent jurisdiction to prevent irreparable harm.

13. GENERAL PROVISIONS

13.1 Entire Agreement. This Contract, including any schedules and attachments expressly incorporated herein, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written.

13.2 Amendments. No amendment, modification or waiver of any provision of this Contract shall be effective unless in writing and signed by duly authorized representatives of both Parties.

13.3 Severability. If any provision of this Contract is held to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

13.4 Waiver. No failure or delay by either Party in exercising any right or remedy under this Contract shall operate as a waiver of such right or remedy, nor shall any single or partial exercise preclude any other or further exercise of any right or remedy.

13.5 Counterparts; Electronic Signatures. This Contract may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Electronic signatures shall be deemed originals for all purposes.

IN WITNESS WHEREOF, the Parties have caused this Contract to be executed by their duly authorized representatives as of the Effective Date.

Seller:

By:

Date:

Buyer:

By:

Date:

What a Forward Sales Contract Is and When It’s Used

A Forward Sales Contract is a binding commercial agreement by which a seller commits to deliver a specified asset, commodity, or quantity of goods to a buyer at a predetermined future date and price. Commonly used in commodities, manufacturing, and financial markets, the contract allocates price risk, specifies quality and delivery mechanics, and establishes payment and remedy terms. Parties may use cash settlement or physical delivery. The agreement is governed by contract law and the chosen governing law clause, and can include margin, collateral, or escrow arrangements to secure performance.

Why Businesses Use Forward Sales Contracts

Forward Sales Contracts let parties lock price and delivery terms in advance, reduce exposure to market volatility, and create predictable cash-flow planning. They provide clear performance obligations, permit inclusion of credit support and remedies, and can be tailored for physical delivery, cash settlement, or staged delivery schedules.

Who Typically Enters and Manages These Agreements

Forward Sales Contracts are used by commercial buyers and sellers who need price certainty and deliverable scheduling; they are common in commodity, manufacturing and financial markets.

Commodities traders and producers who hedge future production and secure forward buyers.
Corporate procurement teams and manufacturers managing input costs and supply schedules.
Financial institutions and brokers offering structured forward or derivative arrangements.

Parties should ensure authorized signatories, credit support, and operational teams are aligned on delivery windows, quality specs, and dispute resolution procedures before execution.

Core Elements to Include in a Professional Forward Sales Contract

A thorough contract defines commercial terms, operational mechanics, and legal protections so parties can enforce obligations and manage risk.

Parties

Full legal names and organizational form for buyer and seller; include contact and billing details, and specify authorized signatories and capacity to bind the entity.

Asset Description

Precise description of the commodity or asset, including grade, quality standards, specifications, and any testing or inspection procedures required at delivery.

Quantity and Units

Exact quantities, measurement units, tolerances, and methods for resolving over/under delivery, including sampling and acceptance criteria.

Price and Payment

Agreed price formula or fixed price, payment schedule, invoicing procedures, currency, and any margin, collateral, or credit support arrangements.

Delivery and Settlement

Delivery location, transfer of title and risk, delivery window or settlement date, permissible carriers, storage, and cash settlement mechanics if applicable.

Remedies and Termination

Events of default, cure periods, liquidated damages or specific performance language, force majeure, dispute resolution and governing law clauses.

Step-by-Step: Completing the Forward Sales Contract

Follow these steps in order to reduce execution errors and to ensure the contract is operational from day one.

01

Draft core terms: Record parties, asset, quantity, price formula, and delivery schedule.
02

Confirm credit support: Specify margin, collateral, letters of credit, or guaranties if applicable.
03

Operational annexes: Attach inspection, delivery, and settlement procedures as exhibits.
04

Sign and distribute: Execute by authorized signatories and circulate final copies to operations and finance teams.

How to Configure an Online Forward Sales Contract Workflow

When digitizing the contract, configure fields, authentication, and notifications to mirror the paper process while preserving auditability.

Field Mapping	Map contract fields to form fields for automation and downstream systems.
Conditional Logic	Use conditional fields for optional collateral, tiered pricing, or alternative settlement methods.
Signature Authentication	Choose signer verification: email link, SMS code, or stronger authentication where required.
Bulk Execution	Enable bulk send for repeat agreements or batch counterparties to streamline volume workflows.
Notifications	Configure alerts for upcoming delivery windows, margin calls, and payment due dates.

Where to Send and How to Route the Executed Contract

Designate recipients and storage locations so each business function receives the executed contract without delay.

Primary Counterparty: Send signed copy to the buyer or seller contact listed in the contract.
Finance and Billing: Route executed contract to accounts payable/receivable for invoicing and payment set up.
Operations Team: Provide delivery and acceptance details to operations and logistics teams.
Contract Repository: Store an executed PDF and audit trail in a secure contract management system.

Digital Signing and Technical Integration Considerations

Select an eSignature platform that records an audit trail, supports the required signer authentication, and integrates with your systems.

Integrations: Connect to CRM, ERP, or document storage systems such as Salesforce, NetSuite, or Google Workspace for automated routing.
File Formats: Use PDF or DOCX for templates; ensure signed PDFs embed an audit trail and are long-term accessible.
Authentication: Support email, SMS, or stronger ID verification where contract value or regulation requires it.

Ensure chosen tools can export tamper-evident signed PDFs, preserve time-stamped audit logs, and meet regulatory or internal compliance needs.

Key Dates and Timing to Specify in the Contract

Define all critical dates clearly to avoid performance disputes and to trigger operational or financial obligations.

Effective Date:

Date when contract obligations commence; enter MM/DD/YYYY.

Delivery Window:

Start and end dates or acceptable delivery period with time-of-day, if relevant.

Settlement Date:

Date for payment or cash settlement tied to delivery or reference pricing.

Notice Periods:

Deadlines for termination, cure, or force majeure notices expressed in calendar days.

Credit Call Deadlines:

Timing for margin or collateral calls and acceptable cure windows.

Common Pitfalls to Avoid When Preparing the Contract

Using imprecise commodity descriptions that create acceptance disputes at delivery and increase litigation risk.
Failing to define the price formula source, publication time, and rounding rules, which leads to price calculation disputes.
Omitting credit support or collateral terms, exposing parties to counterparty default and uncollectible claims.
Neglecting operational exhibits (inspection, transport, storage), causing logistic misunderstandings and late deliveries.

Primary Risks and Potential Consequences of Errors

Breach Damages: Compensatory damages and lost-profit claims.

Specific Performance: Court-ordered delivery may be sought in unique-asset situations.

Margin Calls: Failure to meet margin can trigger liquidation at unfavorable prices.

Tax Reporting: Incorrect reporting may trigger IRS penalties.

Regulatory Fines: Market regulation violations can lead to fines or sanctions.

Operational Loss: Logistics failures can create storage and spoilage costs.

eSignature Pricing and Feature Comparison for Contract Execution

Common eSignature criteria for executing forward sales contracts: starting price, trial availability, bulk sending, audit trail, HIPAA support, and any envelope/document caps.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day trial	Varies	Varies	Varies	Varies
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No
Envelope Cap	No cap	100 envelopes/user/year	Varies	Varies	Varies

Frequently Asked Questions About Forward Sales Contracts

Answers to common execution and enforceability questions to help parties avoid disputes and ensure valid electronic completion.

Need help? Contact support

Are electronic signatures valid?
Yes. Electronic signatures are enforceable under the federal ESIGN Act and applicable state laws when intent, consent, attribution, and retention are satisfied (see ESIGN Act, 15 U.S.C. §7001). Ensure the signature method provides a reliable audit trail.
Do I need a notary or witness?
Most commercial forward contracts do not require notarization, but certain jurisdictions or ancillary instruments (e.g., deeds) may. Confirm local requirements before relying on a notary or witness for enforceability.
Can I use remote online notarization (RON)?
RON availability varies by state. Over 45 states permit permanent RON; check the applicable state notary commission rules and retain required audio-video records when used.
What if the price formula is disputed?
Include a clear reference source, publication time, rounding rules, and dispute resolution procedures. Absent clarity, parties face calculation disputes that can lead to arbitration or litigation.
How should I handle margin or collateral?
Specify initial margin, variation margin triggers, permitted collateral types, valuation timing, and remedies for failure to post to reduce credit exposure and liquidation risk.
How long should I retain contract records?
Retain executed contracts for the contract term plus at least 3 years; follow IRS guidance (IRC §6501(a)) and industry-specific retention rules such as HIPAA (45 CFR §164.530(j)) for healthcare.

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