Minimum Price Contract

This Issue in United States

Concept of Minimum Price Contract in Futures Trading

In this context of financial law, the following is a definition of Minimum Price Contract: A hybrid commercial forward contract for agricultural products that includes a provision guaranteeing the person making delivery a minimum price for the product. For agricultural commodities, these contracts became much more common with the introduction of exchange-traded options on futures contracts, which permit buyers to hedge the price risks associated with such contracts.