In the first two, the problem is that of too much flexibility and generality. The forward market is like the real estate market in that any two consenting adults can form contracts against each other. This often makes them design terms of the deal, which are very convenient in that specific situation, but makes the contracts non-tradable. In a forward contract, two parties agree to do a trade at a future date, at a stated price and quantity. No money changes hands at the time the deal is signed.
Forward contracting is valuable in hedging and speculation.
The classic hedging application would be that of a wheat farmer forward-selling his harvest at a known price in order to eliminate price risk. Conversely, a bread factory may want to buy bread forward in order to assist production planning without the risk of price fluctuations. If a speculator has information or analysis, which forecasts an upturn in price, then she can go long on the forward market instead of the cash market. A speculator would go long on the forward, wait for the price to rise and then reverse a transaction. The use of forward markets here supplies leverage to the speculator.