A
forward contract is an agreement where the buyer, wanting to guarantee
his price, pays for the produce now, but plans to take delivery later.
The
pre-payment has the character of a loan. Should the price of the
produce increase, the buyer will get more than he paid for, similar to
taking interest. Forward contracts are therefore prohibited by the
Sages. The two cases where it is permitted are:
(1) If the seller has the produce in stock, it is considered as if the buyer already had it at the time of price increase;
(2) If the price is established, the seller can easily acquire the goods, thus it is as if he has them.
