Commodity Futures Contract Law and Legal Definition

A commodity futures contract is a firm commitment to deliver or to receive a specified quantity and grade of a commodity during a designated month in the future (the delivery month) at a specified price. All the terms and provisions of a futures contract are fixed by the bylaws and rules of the commodity exchange on which the contract is traded, except for the price and the delivery month, which are agreed upon at the time a trade is made on the floor of the exchange. [New Mexico Timber Co. v. Commissioner, 84 T.C. 1290, 1293 (T.C. 1985)].