So that depends on a few things.. 1) If the contract is physically settled vs financially settled. 2) The existence of a clearinghouse - which is a middleman

So that depends on a few things.. 1) If the contract is physically settled vs financially settled. 2) The existence of a clearinghouse - which is a middleman in charge of making sure both parties deliver on their contractual obligations. Virtually all futures contracts go through a clearinghouse. Lets assume that it is physically settled with no clearinghouse - what happens is the same as any other contract where the other party does not deliver on the terms of the contract (also known as FTD - failure to deliver). You sue them for the damages.