(1) In global trade, an oral or written agreement between two or more parties to do, perform or otherwise carry out certain terms, conditions and actions.
(2) In foreign exchange, an agreement between a bank and its customer to purchase or sell a specific amount of a named currency at a firm rate for delivery and payment on a fixed date. An exception to this definition is the variable delivery date contract where the delivery and payment are between two fixed dates. The contract is normally concluded by telephone or telex followed by a written confirmation. The telephone or telex conversation, however, is considered fully binding.
Contract