Forward contracts firstly serve to hedgers ,who want to make their risk minimum, to success it. On these contracts, the vendor side of the party, wanted to sell goods or services ensures to sell at a later date and protects the vendor side from the most important risk which is called price fluctutation risk.

Buyer side has the guarantee of buying right against to price risk of a good or a service on a later date. With this feature, forward contracts allow to reduce uncertainties and make rational plans to the parties for future.

Forward transactions has also disadvantages. Firstly, making forward contract means having a risk for parties. To illustrate, forward contracts, can face the parties to huge losses because of not being a guarantee system, just being trust. This is available for death or bankcrupcy of one of parties.

It may be guarantee for both side that ending forward transation before value date, at the same time it may block huge loses.

Forward contracts, provide a wide area to choose everything to all parties about qualities, amount, maturity, delivery place and conditions of goods and also provide disadvantages like lack of standart goods or services, not focusing of parties to price of goods.