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McLaughlin, Josetta, and Gerald W. McLaughlin. "Ian MacNeil’s Relational Contract Theory." Proceedings of the International Association for Business and Society 14 (2003): 43–51. http://dx.doi.org/10.5840/iabsproc20031410.
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Cimino, Chapin F. "The Relational Economics of Commercial Contract." Texas A&M Law Review 3, no. 1 (September 2015): 91–130. http://dx.doi.org/10.37419/lr.v3.i1.4.
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Modern contract law scholarship embraces a particularly strange contradiction. On one hand, most legal scholars accept the core insight of what is called relational contract theory: most commercial contracts involve repeat players who seek to maximize wealth while still maintaining cooperative relationships. On the other hand, many of these same contract scholars believe that there is nothing contract law could or should do about it. They contend that contract law and legal theory are better off ignoring this insight, rather than trying to respond to it. This Article brings these disparate lines of contract scholarship together by introducing new information that could dramatically change how legal scholars make sense of relational contract theory. It turns out that while legal scholars have largely discounted the importance of relational contract theory, another community of scholars—working in organizational theory, marketing, and strategic management—have studied, tested, and developed its insights. As a result, they have not only empirically confirmed the presence of relational behaviors in modern contracting, but they have begun to discover the sort of data that might make it possible to better account for the economic effects of relational contracting behavior in both legal theory and contract law doctrine. This literature demonstrates that it is possible to operationalize the insights of relational contract theory in an interdisciplinary way that respects both the need for a methodologically rigorous framework and the complex nature of economic behavior. In this Article, I argue that contract law scholars should set out on that same course.
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Michler, Jeffrey D., and Steven Y. Wu. "Relational Contracts in Agriculture: Theory and Evidence." Annual Review of Resource Economics 12, no. 1 (October 6, 2020): 111–27. http://dx.doi.org/10.1146/annurev-resource-101719-034514.
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We appraise the current status of relational contract theory, along with associated empirical studies, with the goal of providing an orientation to the field to economists who may not have expertise in contract theory. We begin with a theoretical discussion focusing mainly on intuition and the usefulness of the theory for conceptualizing applied agricultural contracting problems. We also discuss current theoretical challenges and the current state of empirical research on relational contracts. We conclude by discussing potentially fruitful areas for future research.
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Tan, Zhong Xing. "Disrupting doctrine? Revisiting the doctrinal impact of relational contract theory." Legal Studies 39, no. 1 (December 18, 2018): 98–119. http://dx.doi.org/10.1017/lst.2018.23.
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AbstractWhile the concept of the ‘relational contract’ has been invoked in the courts with greater visibility and regularity in recent years, the doctrinal import of relational contract theory remains for the most part unclear to contract and commercial lawyers. This paper offers a broad framework for understanding the different ways through which relational theory might have an impact on contract doctrine going forward, and evaluates the promises and perils of doing so.
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McLaughlin, Josetta, Jacqueline McLaughlin, and Raed Elaydi. "Ian Macneil and relational contract theory: evidence of impact." Journal of Management History 20, no. 1 (January 7, 2014): 44–61. http://dx.doi.org/10.1108/jmh-05-2012-0042.
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Purpose – This paper seeks to describe the work of Ian Macneil, a legal scholar advocating the use of relational contract theory and behavioral norms to evaluate exchange relations in business. The aim is to show through bibliometric and comparative analyses that Macneil has influenced management scholarship and dialogue about relational contract theory to an extent not recognized by management scholars. Design/methodology/approach – Evidence of impact is evaluated through a bibliometric analysis of primary and secondary citations. This is followed by a comparison of Macneil's theory with four theories – integrated social contract theory, stakeholder theory, transaction cost theory, and rational choice theory. Findings – Results indicate that Macneil has had a substantial impact on researchers working in different business disciplines, from marketing to economics and management. Bibliometric analysis reveals that his work is widely cited, suggesting that Macneil's contribution extends beyond legal scholarship to influence business scholarship. Research limitations/implications – Implications are that Macneil's relational contract theory should be considered when developing frameworks for guiding research on workplaces that are increasingly relational, connected and global. This is especially relevant in cases where workplace exchange appears on the surface to be non-contractual and based on societal customs and norms. Originality/value – This paper recognizes the work of a major legal scholar in the formulation and discussion of relational contract theory in business scholarship. It introduces concepts that can support and act as a guide for future research on forms of relational exchange and recognizes the importance of Ian Macneil's work in supporting that research stream.
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Dagan, Hanoch. "Intimate Contracts and Choice Theory." European Review of Contract Law 18, no. 2 (June 1, 2022): 104–26. http://dx.doi.org/10.1515/ercl-2022-2040.
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Abstract Contract is one of the key tools liberal law employs in the service of its core mission of enhancing people’s autonomy, and choice theory conceptualizes this task as contract’s telos. It thus prescribes three principles – proactive facilitation, regard for the future self, and relational justice – for guiding the legal constitution of contract law in all spheres of human interaction. Spousal contracts are no exception. Thus, the law governing intimate agreements both allows people to adjust the default rules governing their marital estates and provides people off-the-shelf options for structuring their interpersonal interaction as spouses. In turn, the law of marital contracts ensures that free exit from marriage is, as it should be, immutable. Finally, relational justice guides, albeit still imperfectly, both law’s normative defaults for marital contracts and the rules that govern premarital, marital, and cohabitation agreements.
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Viven-Wilksch, Jessica. "The importance of being relational: comparative reflections on relational contracts in Australia and the United Kingdom." Northern Ireland Legal Quarterly 73, AD2 (October 6, 2022): 94–124. http://dx.doi.org/10.53386/nilq.v73iad2.963.
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The notion of the relational contract, previously limited to academic circles, is now being articulated by some courts. The consequences are threefold. Firstly, these judicial decisions are challenging the conception of agreements in the common law. Secondly, these decisions acknowledge the particularity of some long-term commercial relationships and shift the spotlight onto the relations of the parties. Thirdly, they are being used to integrate obligations to act in good faith. This article will show how these decisions implement the developing theory of relational contracts. The article will discuss recent developments in the United Kingdom and Australia and reflect on the parallel course the two jurisdictions are taking. By providing a bird’s-eye view of normative changes affecting some long-term transactions, the aim of the article is to reflect on how contract law is being reshaped by the recognition that, in some contracts, the relationship, not self-interest, is the vital thing, demonstrating a move away from traditional contract law theory.
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Kapsali, Maria, Jens K. Roehrich, and Pervaiz Akhtar. "Effective contracting for high operational performance in projects." International Journal of Operations & Production Management 39, no. 2 (February 4, 2019): 294–325. http://dx.doi.org/10.1108/ijopm-10-2017-0604.
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Purpose The purpose of this paper is to examine combinations of contract clauses in order to ascertain which combinations correlate to high operational performance (OP). Design/methodology/approach Two hypotheses were formulated from contracting theory and tested on data collected from 45 projects. Fuzzy set qualitative comparative analysis was used and validated with multiple regression and simulation. Findings The hypotheses were tested to determine whether combinations of classical, relational, and/or associational contract clauses correlate to high OP. The results show that whereas high OP correlates to combinations of relational and associational contract clauses, classical and relational clauses should not be combined. Research limitations/implications Directions are proposed to guide future research in order to produce a more nuanced testing of contractual complementarity. Practical implications The managerial implications of the findings include a more thorough understanding of the use of contract clauses and of which clauses managers should combine to achieve high OP. Originality/value This study contributes to the theory of contractual incompleteness and complementarity, specifically in the context of project contracting. The analysis produced two theoretical implications: first, that better performing contracts are created when combining relational and associational contract clauses; and second, that in projects, relational and classical contract clauses are not complementary with regards to realizing high OP.
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Beale, Hugh. "Bridging the Gap: A Relational Approach to Contract Theory." Journal of Law and Society 41, no. 4 (November 27, 2014): 641–51. http://dx.doi.org/10.1111/j.1467-6478.2014.00689.x.
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Wang, Dedong, Shaoze Fang, and Hongwei Fu. "THE EFFECTIVENESS OF EVOLUTIONARY GOVERNANCE IN MEGA CONSTRUCTION PROJECTS: A MODERATED MEDIATION MODEL OF RELATIONAL CONTRACT AND TRANSACTION COST." JOURNAL OF CIVIL ENGINEERING AND MANAGEMENT 25, no. 4 (April 3, 2019): 340–52. http://dx.doi.org/10.3846/jcem.2019.9621.
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Mega construction project governance is an evolutionary process characterized by high transaction costs and complex interrelationships. Based on transaction cost theory, relational contract theory and evolutionary governance theory, this study explored the impact of evolutionary project governance on mega construction project performance by collectively considering the mediating effect of transaction costs and the moderating effect of a relational contract. Partial least squares structural equation modeling was used to test the hypotheses based on data collected from 176 respondents. The results show that evolutionary project governance would be more effective in increasing project performance and reducing transaction costs in the context of a relational contract. Reducing transaction costs is an effective way to improve project performance, and it is an important mediation variable between evolutionary project governance and project performance in the context of a relational contract. The results enrich the theory on mega construction project governance and reduce the imbalance between theory and practice in previous studies.
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Dietz, Thomas. "Contract Law, Relational Contracts, and Reputational Networks in International Trade: An Empirical Investigation into Cross-Border Contracts in the Software Industry." Law & Social Inquiry 37, no. 01 (2012): 25–57. http://dx.doi.org/10.1111/j.1747-4469.2011.01281.x.
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The following case study investigates the contract enforcement institutions that enable German customers to purchase software in Asia and Eastern Europe. The case study shows that nation-states are hardly able to generate a legal “shadow” for cross-border business relations. The same holds true for the so-called New Lex Mercatoria. Instead, economic actors create their own informal mechanisms. Relational contracts and reputational networks are nowadays far more effective due to developments in the field of information and communication technology. Overall, the importance of formal contract law in international trade is even smaller than is assumed by the classic theory of relational contracts.
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Snyder, Franklin G., Ian R. Macneil, John Kidwell, David Campbell, and Rachel Arnow-Richman. "Relational Contracting In A Digital Age; Panel Discussion." Texas Wesleyan Law Review 11, no. 2 (March 2005): 675–706. http://dx.doi.org/10.37419/twlr.v11.i2.22.
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If, as it has sometimes been argued, changes in contract rules and theory are strongly affected by changes in economic conditions, we should note that the world has changed a good deal since the early 1960s when relational contract theory began to bloom. The economic world of 2004 is very different from the world of 1964. Modern relational contract theory was born about the same time as its great theoretical competitor, the rational choice approach of the legal economists. It came before the vast changes wrought by the information revolution and the increased globalization of the economy. What has relational theory taught us over the past forty years? How has it changed and adapted in light of those great economic changes? Where is it going in the future? Those were the general topics at a panel discussion which took place June 8, 2004, at the Oxstalls campus of the University of Gloucestershire in Gloucester, England. It was part of a conference entitled, "The Common Law of Contracts as a World Force in Two Ages of Revolution," which marked the 150th anniversary of one of the most famous contracts cases of all time, Hadley v. Baxendale, and is the theme of the present Symposium. The Conference's object was to explore how the common law adapts to and influences the kind of revolutionary changes that have swept over our society in the past forty years, and which swept over England in the forty years before Hadley v. Baxendale.
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Illig, Robert. "The Dog That Didn't Bark: Private Investment Funds and Relational Contracts in the Wake of the Great Recession." Michigan Business & Entrepreneurial Law Review, no. 2.1 (2012): 49. http://dx.doi.org/10.36639/mbelr.2.1.dog.
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In the aftermath of the subprime mortgage crisis, the contract rights of numerous hedge funds and venture capital funds were breached. These contracts were complex and sophisticated and had been negotiated at great time and expense. Yet despite all of the assumptions of neo-classical contracts theory, nothing happened. Practically none of these injured parties sued to enforce their rights. Professor Illig uses this dearth of litigation to conduct a form of natural experiment as to the value of contract law. Discrete market participants contracted before the crash and then pursued their rights in court afterwards, while relational market participants contracted but refrained from suing. Given this bifurcated response to the identical stimulus, Professor Illig queries: why did the relational parties bother to contract in the first place? If they could have predicted the likelihood of their ex post inertia, then as rational economic actors they must have valued contracting for something other than as insurer of their reasonable expectations. For them, a contract must provide significant symbolic and ceremonial value. Based on this finding—as well as on complementary research from the field of behavioral economics—Professor Illig concludes by arguing against a universalist approach to contract law. Instead, he recommends that contract doctrine be evolved to reflect its dual nature—as insurer of expectations in the context of discrete exchanges and as a source of imagery and ritual in the context of relational affiliations. Doing so would enhance the impact of social norms as a mechanism for avoiding and resolving disputes.
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Barnett, Randy E. "Conflicting Visions: A Critique of Ian Macneil's Relational Theory of Contract." Virginia Law Review 78, no. 5 (August 1992): 1175. http://dx.doi.org/10.2307/1073395.
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Thompson, Sharon. "Feminist Relational Contract Theory: A New Model for Family Property Agreements." Journal of Law and Society 45, no. 4 (November 8, 2018): 617–45. http://dx.doi.org/10.1111/jols.12132.
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Petersen, Bent, and Kim Østergaard. "Reconciling contracts and relational governance through strategic contracting." Journal of Business & Industrial Marketing 33, no. 3 (April 3, 2018): 265–76. http://dx.doi.org/10.1108/jbim-09-2016-0223.
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Purpose In an industrial marketing context of manufacturer–distributor collaboration, this law and economics paper aims to contrast two approaches to contracting: conventional and strategic. Design/methodology/approach Based on relational rent theory, this paper provides an analytical framework for juxtaposing conventional and strategic contracting. A contingency approach is applied to formulate propositions as to when conventional versus strategic contracting is preferable. Findings The distinction between conventional and strategic contracting has implications as to whether relational governance substitutes or complements formal contracts (the substitution versus complements perspectives). Strategic contracting results in complementarity (rather than substitutability) between formal contracts and relational governance. Research limitations/implications This paper argues that a more nuanced view on contract types, such as strategic versus conventional, may reconcile the enduring research controversy between the substitution and complements perspectives. Practical implications Today, formal contracts with foreign distributors tend to resemble “prenuptial agreements”. The opportunity for relational rent (e.g. manifested in higher export revenues) grows if conventional contracts are superseded by contracts following strategic contracting principles. Originality/value This study is interdisciplinary, not only by its combination of marketing, management and contractual economics but also through its law and economics amalgamation.
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Jobidon, Gabriel, Pierre Lemieux, and Robert Beauregard. "Comparison of Quebec’s Project Delivery Methods: Relational Contract Law and Differences in Contractual Language." Laws 8, no. 2 (April 3, 2019): 9. http://dx.doi.org/10.3390/laws8020009.
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The province of Quebec, Canada, seeks to implement relational alternate project delivery methods to achieve sustainability and energy efficiency in public construction. However, the relational differences between the formal written parts of different delivery methods have yet to be analyzed and understood, as is the case with the relational aspects of contracts and the achievement of sustainable and energy-efficient infrastructure. Using a hermeneutic interpretation of Macneil’s relational contract norms and grounded theory, 26 contracts involving Quebec’s largest public client of vertical infrastructure and representing three different types of project delivery methods (design–bid–build (DBB), design–Build (DB), and construction manager–general contractor/integrated project delivery (CMGC/IPD)) were analyzed using NVivo. It was found that CMGC/IPD is the most relational project delivery method available to Quebec’s public clients, namely because of the public client’s active involvement in the realization process, the increasing complexity of roles, the multitude of common management structures, and the internalization of sustainability measures and conflict resolution. Furthermore, Quebec’s CMGC/IPD was found to be an IPD-ish delivery method, lacking the early involvement of the construction manager and the risk/reward sharing mechanisms necessary to achieve pure IPD status. The findings and theoretical considerations discussed here will help policymakers, contract drafters, and public clients interested in implementing relational contracting practices in public construction projects.
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Syrek, Christine J., and Conny H. Antoni. "Psychological Contract Fulfillment and Employee Responses to Pay System Change." Journal of Personnel Psychology 16, no. 4 (October 2017): 172–85. http://dx.doi.org/10.1027/1866-5888/a000186.
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Abstract. The implementation of a new pay system is a balancing act that produces uncertainty and draws employees’ attention to the fulfillment of exchange agreements. Transformational leadership may be essential during these change processes. Based on psychological contract theory, we expected that transformational leadership impacts job satisfaction and affective organizational commitment through the fulfillment of relational psychological contracts, while the fulfillment of transactional psychological contracts may be crucial for employees’ pay and bonus satisfaction. We assessed 143 employees nested within 34 teams before and after (24 months) a pay for performance (pfp) system was introduced. Our results supported the mediation hypotheses considering job and pay satisfaction, but not considering commitment. Unexpectedly, the effect on bonus satisfaction was mediated via relational psychological contracts.
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LIU, Hongyan, Jinglan Yang, and Xiaoxi Chen. "Making the Customer-Brand Relationship Sustainable: The Different Effects of Psychological Contract Breach Types on Customer Citizenship Behaviours." Sustainability 12, no. 2 (January 15, 2020): 630. http://dx.doi.org/10.3390/su12020630.
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Customer citizenship behaviours are important for a sustainable customer-brand relationship, yet little is known about the effect of psychological contract breach on citizenship behaviours. From the perspective of psychological contract theory, this research examined the impact of psychological contract breaches on customer citizenship behaviours through the mediating mechanism of psychological contract violation in the customer-brand relationship. Experiments were used to assess the effect of two types of psychological contract breaches on customer citizenship behaviours. The results show that the negative effect of a relational contract breach differs between the dimensions of citizenship behaviours. A relational contract breach has direct and indirect negative effects on recommendation behaviours and helping behaviours, but it does not affect voice behaviours. A transactional contract breach directly and negatively influences recommendation behaviours, but it has no effect on voice behaviours. A transactional contract breach indirectly increases helping behaviours through psychological contract violation. Psychological contract violation partially mediates the effect of a transactional contract breach on customer recommendation behaviours and fully mediates the effect of a relational contract breach on helping behaviours. These findings generate managerial implications for firms aiming to maintain sustainable customer-brand relationships.
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Mallette, Claire. "Nurses’ work patterns: perceived organizational support and psychological contracts." Journal of Research in Nursing 16, no. 6 (September 29, 2011): 518–32. http://dx.doi.org/10.1177/1744987111422421.
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With unfolding human resource challenges in health care, little is known of the impact of changing work patterns and employment relationships on the organization and the nursing profession. Social Exchange Theory (perceived organizational support (POS) and psychological contracts) was used to gain understanding of the influence of nurse's employment patterns on employment relationships and individual, organizational and professional outcomes. The sample consisted of 650 randomly selected nurses employed in full-time, part-time, and casual positions across healthcare settings in Ontario, Canada. A cross-sectional survey design explored demographics, volition, POS, psychological contract, job satisfaction, career commitment, and job and career withdrawal. Work patterns and employment relationships are complex and cannot be examined in isolation of other variables such as volition and work congruence. Full-time nurses were found to have more of a relational psychological contract than part-time or casual nurses. The hypothesis was supported that the psychological contract has a direct effect on nurses’ job satisfaction, job withdrawal, career commitment, and career withdrawal. Nurses want to work different work patterns depending on their age and work-life demands. The importance of fostering strong employment relationships and relational psychological contracts to address such issues as an ageing workforce, nursing shortages, and economic demands is highlighted.
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Zhu, Shaoying, Yuxin Wu, and Qian Shen. "How Environmental Knowledge and Green Values Affect the Relationship between Green Human Resource Management and Employees’ Green Behavior: From the Perspective of Emission Reduction." Processes 10, no. 1 (December 25, 2021): 38. http://dx.doi.org/10.3390/pr10010038.
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Green human resource management (GHRM) determines the green behavior practice of employees and affects the social environment and the realization of “Beautiful China” and “Green Development”. In this study, to explore the impact mechanism of GHRM on employees’ green behavior, employees at all levels in an enterprise were selected to be research subjects and a regulated intermediary model was established, based on social exchange theory and the individual-environment matching theory. This paper investigated the enterprise’s GHRM, personal green behavior, relational psychological contract, environmental knowledge and green values. The results show that GHRM has a significant positive predictive effect on employees’ green behavior, the relational psychological contract plays an intermediary role between GHRM and employees’ green behavior and the intermediary role of the relational psychological contract is regulated by environmental knowledge and green values. These research results explain the relationship between GHRM and employees’ green behavior and provide an important basis for enterprises to implement GHRM practice and promote employees’ green behavior.
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KIRPICHEV, A. E., R. V. SHAGIEVA, S. V. NIKOLYUKIN, N. E. BORISOVA, and V. V. RALKO. "Νοn-Classical Paradigms in Contract Law in the American, European and Russian Legal Doctrines." Journal of Advanced Research in Law and Economics 9, no. 5 (June 9, 2019): 1660. http://dx.doi.org/10.14505//jarle.v9.5(35).18.
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Thematic justification: In many regions of the world, scholars have renewed a discussion on the nature and properties of contracts as a legal phenomenon, leading to the emergence of so-called ‘non-classical theories of contract’: contract as a promise, relational contract, contract as a network etc.
This article’s aim is to compare non-classical approaches to contract and check the possibility of creating a modern holistic theory of contract. This article’s methodology is based on the functional method, the use of which provides a comparative perspective, meaning that each of the explored approaches to the theory of contract should be studied in the context of its causes and problems it solves.
The article systematizes problems solved by non-classical theories of contracts and concludes that the development of a new theory means the appearance of a new solution, not only for the problem for which it was designed but also for some others from the list. No theory solves all the problems of contract law. Numerous theories of the 20th and 21st centuries have shown the directions, in which it is necessary to carry out research and to seek approaches whose combinations and mutual critical evaluations will allow the formation of a met theory of contract law, the further development of which can lead to a dominant paradigm shift in response to the emergence of an integrative legal theory of contract viewed in a holistic manner as a multifaceted phenomenon.
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Yu, Cheon. "Analysis of CISG clauses and China’s Decision Cases using Relational Contract Theory." Korea Association for International Commerce and Information 20, no. 4 (December 30, 2018): 289–308. http://dx.doi.org/10.15798/kaici.2018.20.4.289.
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Liu, Wenlong, Changqing He, Yi Jiang, Rongrong Ji, and Xuesong Zhai. "Effect of Gig Workers’ Psychological Contract Fulfillment on Their Task Performance in a Sharing Economy—A Perspective from the Mediation of Organizational Identification and the Moderation of Length of Service." International Journal of Environmental Research and Public Health 17, no. 7 (March 25, 2020): 2208. http://dx.doi.org/10.3390/ijerph17072208.
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Workers’ isolation may occur in gig employment in the sharing economy, which generates a weak perception of the organization and unpredictable work performance. Drawing on social exchange theory, this paper proposes a framework to explore the effect of psychological contract fulfillment on gig workers’ task performance from the perspective of the mediation of organizational identification and the moderation of the length of service. A total of 223 samples were recruited from Didi (a ride-hailing company in China) drivers. The results show that both transactional and relational psychological contract fulfillment can directly affect gig workers’ task performance and also indirectly affect it via organizational identification. When the length of service for the current company is taken into consideration, transactional contract fulfillment, as the representation of a company’s recognition of gig workers’ effort, has a stronger effect on the organizational identification of gig workers who have been working for the company for less than a year compared with those who have been working for a longer period. The results show no difference in the relationship between relational psychological contract and organizational identification between the two groups. Transactional psychological contract fulfillment exhibits the same significant effect on gig workers’ task performance in both groups. By contrast, relational psychological contract fulfillment has a stronger effect on long-serving Didi drivers than on those who joined the company within the year. These findings generate certain theoretical and practical implications for gig employment management in the sharing economy.
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Gorovaia, Nina. "Determinants, transactional alignment, and performance outcomes of franchise contract length." International Journal of Retail & Distribution Management 47, no. 7 (November 13, 2018): 714–32. http://dx.doi.org/10.1108/ijrdm-10-2017-0245.
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Purpose The purpose of this paper is to explore the determinants, transactional alignment and performance outcomes of franchise contract length using transaction costs theory (TCT) and resource-based theory (RBT). Design/methodology/approach The author hypothesizes that franchisors choose contract length according to TCT and RBT arguments. TCT explains the safeguarding function of contracts: the franchisors will offer longer contracts when franchisees’ specific investments are high and environmental uncertainty is low. RBT highlights the knowledge leverage function of contracts: the franchisors will offer longer contracts when the brand name and intangible knowledge assets are high. Franchise companies that design contract length aligned with transactional attributes will perform better. The author tests the misalignment hypothesis and comparative performance of franchise contracts by estimating two-stage least squares regression and Heckman two-stage procedure that control for endogeneity and self-selection. Findings Empirical data from the German franchise sector support the hypotheses. In addition to the safeguarding function, franchise contracts have an important knowledge leverage function. Longer contracts perform better due to the development of relational strategic assets and stronger commitment. Research limitations/implications Franchisors must offer longer contracts when specific investments of franchisees, brand name, intangible knowledge assets are high, and environmental uncertainty is low. Franchisors should invest in the development of relational strategic assets and offer longer contracts for the benefit of superior performance. Originality/value The study addresses the significant question of transactional alignment and comparative performance of franchise contracts. It empirically confirms the importance of RBT in explaining contractual choices and performance.
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Hurmerinta-Haanpää, Anna, and Sampo Viding. "The functions of contracts in interorganizational relationships: A contract experts’ perspective." Journal of Strategic Contracting and Negotiation 4, no. 1-2 (March 2018): 98–118. http://dx.doi.org/10.1177/2055563619884791.
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Previous research has shown how contracts are used together with relational governance (RG) mechanisms to manage interorganizational relationships (IORs). Moreover, research has found that contracts are used in safeguarding, adapting, and coordinating business relationships. Based on the findings of an interview study with 24 contract experts, we argue that, in addition to safeguarding, adaptation, and coordination, firms use contracts to: codify their deals; steer their internal work; and plan, promote, and steer collaboration. On the one hand, when used intelligently, contractual techniques that reflect different functions can enhance IOR performance. On the other hand, the careless use of contracts can negatively affect RG and IOR performance. Our research has notable theoretical and managerial contributions, as it develops the theory of the functions of contracts and argues that the functions are fundamental to designing a contract that aims to complement RG and support IOR performance.
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Kimel, D. "The Choice of Paradigm for Theory of Contract: Reflections on the Relational Model." Oxford Journal of Legal Studies 27, no. 2 (December 20, 2005): 233–55. http://dx.doi.org/10.1093/ojls/gqm003.
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Jabeen, Fauzia, Mohamed Behery, and Hossam Abu Elanain. "Examining the relationship between the psychological contract and organisational commitment." International Journal of Organizational Analysis 23, no. 1 (March 9, 2015): 102–22. http://dx.doi.org/10.1108/ijoa-10-2014-0812.
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Purpose – The aim of this study is to examine the impact of the psychological contract, relational psychological contract and transactional psychological contract on organisational commitment as mediated by transactional leadership in the United Arab Emirates (UAE) context. The paper also explores the contractual status to determine if the theory remains valid, regardless of the fact whether one is employed as a contingent or permanent worker. Design/methodology/approach – This research made a longitudinal study spanning a 24-week time period. Data were collected using a self-administered structured questionnaire prepared in English and Arabic, at three stages representing three visits to the participating companies in the UAE. Pearson’s correlation analysis and multiple regression analysis were used to examine the research hypotheses. Findings – The results show that the psychological contracts (transactional and relational) are positively related to transactional leadership. This study categorizes several consequential relationships between transactional leadership and organisational commitment. It also advocates that transactional leadership has only a fractional mediating role in relation to relational psychological contract, transactional psychological contract and organisational commitment. Practical implications – The findings suggest that practitioners and academics alike should note that the nature of the psychological contract employed will impact upon commitment and retention. Originality/value – This study makes a significant contribution to the body of literature, being the second part of a longitudinal study that aimed at testing the mediating effect of transactional leadership on organisational commitment within the context of the UAE. In the earlier study, the intent was to analyse the role of transformational leadership as a mediator between the psychological contract and organisational commitment. Typically, transformational leadership has been found to partially mediate the above mentioned relationships. In addition, it also advocates that there may be some value in considering the employees’ contractual status with regard to the psychological contract and its impact on organisational commitment.
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Gounari, Zoe. "Developing a relational law of contracts: striking a balance between abstraction and contextualism." Legal Studies 41, no. 2 (January 18, 2021): 177–93. http://dx.doi.org/10.1017/lst.2020.23.
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AbstractRelational contract theory holds that the interpretation of a contract must take full account of the context and surrounding circumstances of the parties’ bargain so as to give effect to their respective intentions. This paper argues that if a relational treatment of contracts is to be institutionalised, in the sense of being utilised in a contract dispute to determine and give effect to the parties’ intentions, then it must operate at an abstract level. That is to say, rather than using relevant context to determine what the actual parties intended in the circumstances at hand, the contextualist enquiry should ascertain the relevant context by reference to what the parties would have agreed to in the circumstances, had they properly reflected on what their self-interest requires. I discuss the merits of this proposition by reference to a number of appellate judgments, which already endorse contextualism as a response to contractual ambiguity, and I ultimately apply it to the Supreme Court's judgment in Rainy Sky SA v Kookmin Bank.
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Wacker, John G., Chenlung Yang, and Chwen Sheu. "A transaction cost economics model for estimating performance effectiveness of relational and contractual governance." International Journal of Operations & Production Management 36, no. 11 (November 7, 2016): 1551–75. http://dx.doi.org/10.1108/ijopm-10-2013-0470.
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Purpose As outsourcing continues to grow, supplier management becomes critical to the success of manufacturing firms. Transaction cost economics (TCE) suggests that firms should choose supplier governance mechanisms to ensure fulfillment of contractual obligations and safeguard against opportunism for their outsourcing activities. Accordingly, the purpose of this paper is to examine how buying organizations govern supplier contracts to improve manufacturing competitiveness and financial performance. The relative effectiveness of two primary governance mechanisms, contractual governance (CG), and relational governance, are examined. Design/methodology/approach Expanding upon previous studies, this study delineates three relational governance mechanisms (negotiation efficiency (NE), problem solving relations, and information sharing (IS)) that are conceptually, statistically and pragmatically different. Based on the TCE literature, a conceptual model is developed to decipher the relationships between pre-contract conditions (supplier asset specificity and environmental uncertainty (EU)), governance mechanisms, performance ambiguity (PA), and performance. Using the data collected from 987 firms, the statistical results present several important findings that would advance current theory and practice in outsourcing. Findings The authors find empirical support for the effects of contractual and relational governance in improving manufacturing and financial performance. The governance of supplier contracts clearly facilitates manufacturers’ ability to leverage their resources to improve performance. The relative effectiveness of these two governance mechanisms is related to the levels of EU and supplier asset specificity. Relational governance displays greater influence on performance than CG does. However, CG appears to be complementary to relational governance. Research limitations/implications The interplays between supplier asset specificity and EU should be examined in the future. The relationships among NE, IS, and problem solving should also be examined to facilitate the development of relational governance. Practical implications Managers should be aware of the situational performance of governance mechanisms. Moreover, it is important to realize how differently each of the three relational governance mechanisms and CG contribute to performance. Originality/value This study extends the academic discussion of supplier governance by investigating the alignment of governance mechanisms (relational governance and CG) with pre-contract conditions to reduce PA and, thereby, enhance manufacturing performance. Under the theoretical framework of TCE, the direct and indirect effects of pre-contract conditions and governance variables are fully examined and discussed. Moreover, relational governance involves multiple mechanisms that are conceptually and pragmatically different, and future studies should not treat it as one single construct.
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Nwajei, Una Obiose Kriston. "How relational contract theory influence management strategies and project outcomes: a systematic literature review." Construction Management and Economics 39, no. 5 (May 4, 2021): 432–57. http://dx.doi.org/10.1080/01446193.2021.1913285.
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Day, Katherine. "Publishing Agreements Through a Sharper Lens: How Relational Contract Theory Informs Author–Publisher Negotiations." Publishing Research Quarterly 37, no. 2 (April 26, 2021): 152–67. http://dx.doi.org/10.1007/s12109-021-09806-9.
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Jobidon, Gabriel, Pierre Lemieux, and Robert Beauregard. "Implementation of Integrated Project Delivery in Quebec’s Procurement for Public Infrastructure: A Comparative and Relational Perspective." Sustainability 10, no. 8 (July 27, 2018): 2648. http://dx.doi.org/10.3390/su10082648.
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Province of Quebec (Canada) is in the process of implementing integrated project delivery (IPD) in its procurement process for public infrastructure to more effectively and efficiently achieve functional, environmental, and economic objectives. This paper analyzes the procurement legislation, regulations, and context of three jurisdictions through a comparative law approach and under the light of Macneil’s relational contract theory. It is found that Quebec’s procurement process has transactional features that should be counterbalanced, in the context of IPD implementation, by focusing on relational values, whether at the macro or personal level. These relational mechanisms should help legislators and public bodies establishing and operationalizing a viable and relational context of professional services and construction works procurement for IPD projects.
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Gibb, Michael. "Relational Contractualism and Future Persons." Journal of Moral Philosophy 13, no. 2 (March 16, 2016): 135–60. http://dx.doi.org/10.1163/17455243-4681057.
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A moral theory should tell us something about our obligations to future persons. It is therefore sometimes objected that contractualist moral theories cannot give a satisfactory account of such obligations, as there is little to motivate a contract with persons who can offer us almost nothing in return. I will argue that more recent “relational” forms of contractualism escape these objections. These forms of contractualism do, however, remain vulnerable to Derek Parfit’s non-identity problem. Recent attempts to resolve this problem have looked to the role “generic reasons” and “standpoints” play in contractualist theories. I argue that these views provide an important line of response in cases where the deliberating agent has limited information about the identities of those their actions will affect, but that the non-identity problem is not such a case. I conclude by considering some remaining options for the relational contractualist.
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Minow, Martha, and Mary Lyndon Shanley. "Relational Rights and Responsibilities: Revisioning the Family in Liberal Political Theory and Law." Hypatia 11, no. 1 (1996): 4–29. http://dx.doi.org/10.1111/j.1527-2001.1996.tb00504.x.
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This article discusses three main orientations in recent works of legal and political theory about the family—contract-based, community-based, and rights-based—and argues that none of these takes adequate account of two paradoxical features of family life and of the family's relationship to the state. A coherent political and legal theory of the family in the contemporary United States requires recognition of the relational rights and responsibilities intrinsic to family life.
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Dagan, Hanoch, and Michael Heller. "Freedom, Choice, and Contracts." Theoretical Inquiries in Law 20, no. 2 (July 26, 2019): 595–635. http://dx.doi.org/10.1515/til-2019-0023.
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Abstract In “The Choice Theory of Contracts,” we explain contractual freedom and celebrate the plurality of contract types. Here, we reply to critics by refining choice theory and showing how it fits and shapes what we term the “Contract Canon”. I. Freedom. (1) Charles Fried challenges our account of Kantian autonomy, but his views, we show, largely converge with choice theory. (2) Nathan Oman argues for a commerce-enhancing account of autonomy. We counter that he arbitrarily slights noncommercial spheres central to human interaction. (3) Yitzhak Benbaji suggests that choice theory’s commitment to autonomy is overly perfectionist. Happily, in response to Benbaji, we can cite with approval Charles Fried’s point that contract types are “enabling our liberties.” II. Choice. (4) Aditi Bagchi criticizes our inattention to impediments to choice. We show how choice theory’s commitments to both multiplicity and relational justice ameliorate these impediments. (5) Gregory Klass explores parol evidence to highlight the mechanisms of choice. We substantially concur with his position, and show how such mechanisms can ensure voluntariness, an essential element of choice. (6) Oren Bar-Gill and Clayton Gillette question the institutional capacity of existing legal actors to implement choice theory. Working from the example of cohabitation, we offer a somewhat more optimistic view. III. Contracts. (7) Peter Benson contends our focus on the rational slights the reasonable. Although we did not use this Rawlsian vocabulary, choice theory complies with its strictures — more so than transfer theory. (8) Daniel Markovits and Alan Schwartz claim provocatively that contract theory must: capitulate before pluralism (as they endorse); leverage it; or fall victim to a so-called “embracing” approach (their charge against us). We reject the charge that choice theory is foundationally value-pluralist. Instead, we cabin pluralism and put it to work. (9) The Contract Canon starts on the next big step for choice theory by explaining existing doctrine (rebutting Benson on lack of fit) and helping adjudicate contract practice (countering Markovits and Schwartz on the vices of our pluralism). Each Article in this Issue advances the field; each prompts us to refine choice theory — all steps, we hope, toward a more just and justified law of contract.
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이수형. "The Theory of Relational Contract and Rights of Residual Control in ROK-U.S. Strategic Alliance." Korea and World Politics 27, no. 3 (September 2011): 1–28. http://dx.doi.org/10.17331/kwp.2011.27.3.001.
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Tran, Huy Phuong. "How authentic leadership promotes individual knowledge sharing: viewing from the lens of COR theory." Management & Marketing. Challenges for the Knowledge Society 14, no. 4 (December 1, 2019): 386–401. http://dx.doi.org/10.2478/mmcks-2019-0027.
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Abstract Fostering knowledge sharing has been one of the most vital tasks for organizations in the knowledge based economy. Thus, investigating the antecedents of knowledge sharing behavior is of great interest to both academics and practitioners. The impact of leadership on knowledge sharing has been reported in the literature. However, the direct and indirect impacts of authentic leadership on knowledge sharing is under-researched. Furthermore, because knowledge is an individual resource, knowledge sharing can be investigated in the light of the conservation of resource theory. This study applies conservation of resource theory to examine the influence of authentic leadership on knowledge sharing with relational psychological contract and organizational based self-esteem as mediators. Data collected from survey using questionnaire were used to test the hypotheses in a quantitative research design. Structural equation modelling (SEM) techniques are applied for data analysis. The results showed that authentic leadership positively and significantly influence individual knowledge sharing. Furthermore, relational psychological contract and organizational based self-esteem have been found to mediate the above relationship. Discussion of research findings, theoretical and practical implications are also detailed. Finally, the study outlines limitations of research and provides directions for further knowledge sharing studies.
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Bandyopadhyay, Chiradip, and Kailash B. L. Srivastava. "The Mediating Role of Relational and Transactional Psychological Contract Fulfilment on the Relationship between Strength of the HR Signals and Job Satisfaction." Vikalpa: The Journal for Decision Makers 47, no. 4 (December 2022): 288–302. http://dx.doi.org/10.1177/02560909221145769.
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The article is an employee-level, quantitative survey-based study investigating the relationship between HR signals and job satisfaction through the intermediary role of psychological contract (PC) fulfilment. Signalling theory and attributional theory provide the theoretical context to the study linking HR signals to job satisfaction. PC fulfilment has been viewed in terms of relational and transactional contract types. Analysis of the mediating ability of the two PC types reveals the differential extent of influencing the considered relationship. Primary data, in terms of employee responses from participating firms, have been collected through questionnaires. A two-step sampling process has been followed to select participating firms and respondents. Structural equation modelling has been carried out to examine the hypothesized relationships among the variables. The study contributes to the literature and has implications for practising managers. It provides evidence towards the attributional role of HR signals within firms. Moreover, it reveals a higher mediating effect by relational PC fulfilment than transactional PC fulfilment. Based on the study’s findings, practising managers need to pay closer attention to relational PCs than transactional PCs. The study contributes to a better understanding of the role of HR signals in manufacturing sector firms. The time, cost incurred for the survey and accessibility to firms for participation are some of the significant limitations affecting the study.
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Chambel, Maria J., Laura Lorente, Vânia Carvalho, and Isabel Maria Martinez. "Psychological contract profiles among permanent and temporary agency workers." Journal of Managerial Psychology 31, no. 1 (February 8, 2016): 79–94. http://dx.doi.org/10.1108/jmp-02-2014-0070.
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Purpose – Based on the psychological contract (PC) theory, the purpose of this paper is to identify PC profiles, differentiating between permanent and temporary agency workers (TAW). Moreover, the authors analyzed whether different profiles presented different levels of work engagement. Design/methodology/approach – A cross-sectional survey data analysis of 2,867 workers, of whom 1,046 were TAW, was analyzed using latent profile analyses. Findings – Four PC profiles were identified, which differed quantitatively in terms of the overall dimension levels (i.e. balanced, relational and transactional) for PC (i.e. content and fulfillment). ANCOVAs showed that the relational/balanced dominant and transactional dominant profiles presented similar engagement levels for TAW, but for permanent workers the former profile showed higher engagement than the latter. However, for both permanent and TAW the fulfillment profile showed higher engagement than the unfulfillment profile. Research limitations/implications – The cross-sectional design and the reliance on self-report measures are the limitations of this study, although no causality was claimed and method biases were controlled. Practical implications – Actions that increase PC fulfillment positively affect the employment relationship of TAW with the client organization. Originality/value – Few studies have addressed PC typologies. Furthermore, most studies have focussed on temporary workers, but not on TAW and their contract with the client organization. Finally, this study emphasizes the crucial role played by the PC in the levels of work engagement.
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Oberoi, Swati, Smita Srivastava, Vishal K. Gupta, Rohit Joshi, and Atul Mehta. "Crowd Reactions to Entrepreneurial Failure in Rewards-Based Crowdfunding: A Psychological Contract Theory Perspective." Journal of Risk and Financial Management 15, no. 7 (July 8, 2022): 300. http://dx.doi.org/10.3390/jrfm15070300.
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Rewards-based crowdfunding (RBC) has recently gained popularity as an alternative means of finance to help entrepreneurs bring novel projects to life. We theorize that crowdfunding backers perceive an implicit psychological contract with campaign creators. When promised rewards fail to materialize post fundraising, backers may perceive entrepreneurs’ failure to deliver rewards as a violation of their psychological contract with him or her. Drawing on psychological contract theory and using Eisenhardt’s comparative case methodology, we generate insights about crowd reactions to creators’ failure to deliver rewards to backers. Our research generates the novel insight that in the event of delivery failure, backers who perceive a transactional psychological contract with creators are more likely to display negative emotional reactions, while backers who perceive a relational psychological contract are more likely to display positive emotional reactions. Furthermore, we identify three progressive stages of backers’ interaction with creators in failed RBC campaigns, ‘committing’, ‘crisis handling’, and ‘coping-up’ and highlight the crowds’ emotional valence associated with each stage. Our analyses of the campaign comments reveal insights of interest to RBC players and hold implications for the future development of crowdfunding.
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Chaudhry, Theresa Thompson. "Relational Contracting in Pakistan’s Surgical Instrument Cluster: An Empirical Study." Pakistan Development Review 49, no. 3 (September 1, 2010): 213–37. http://dx.doi.org/10.30541/v49i3pp.213-237.
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This paper tests an idea from relational contracting theory [Macauley (1963); North (1990); Greif (1994); Kranton (1996)] that informal relationships can substitute for formal contract enforcement through the judicial system, from the analysis of a new survey of the surgical instrument cluster in Sialkot, Pakistan. Inter-firm trust is thought to lead to reduced transaction costs (a passive benefit of a cluster). Considered here are exchanges of goods between clustered suppliers and their customers, who are either members of the cluster or firms that interact frequently with it. Inter-firm trust is measured as the amount of trade credit offered to customers. The results show that suppliers are more likely to offer trade credit when they believe in the effectiveness of formal contract enforcement and when they participate in business networks (proxied by inter-firm communication). There is also some evidence that customer lock-in helps to develop inter-firm trust since firms give more credit when relationships are of longer duration, and as locked-in customers are less able to find alternate suppliers.
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Johnson, Alex M. "Correctly Interpreting Long-Term Leases Pursuant to Modern Contract Law: Toward a Theory of Relational Leases." Virginia Law Review 74, no. 4 (May 1988): 751. http://dx.doi.org/10.2307/1073123.
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Østergaard, Kim, and Bent Petersen. "The application of hardship and gain provisions in strategic contracting." Journal of Strategic Contracting and Negotiation 4, no. 4 (December 2018): 203–18. http://dx.doi.org/10.1177/2055563620907905.
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Strategic contracting is based on the fundamental condition of risk and gain sharing in the course of relational rent creation. The mutual application of hardship and gain provisions implies that if such an instance occurs after the conclusion of the contract, the parties have an obligation to renegotiate the contract in a fair manner. However, even though strategic contracting strives to ensure the alignment of incentives, there might still be a risk of hold-up and perhaps even efficient breach of contract. We apply the classical microeconomic risk-preference theory of expected utility and transaction cost theory in order to develop a form of strategic contracting that entails the use of a reciprocal hardship and gain provisions, which helps the contracting parties deal with such instances. We outline three necessary and cumulatively sufficient conditions under which hardship and gain provisions make economic sense.
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Ling, Florence Y. Y., and Wei Wey Khoo. "Improving relationships in project teams in Malaysia." Built Environment Project and Asset Management 6, no. 3 (July 4, 2016): 284–301. http://dx.doi.org/10.1108/bepam-04-2015-0014.
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Purpose – The purpose of this paper is to investigate relational practices that can improve construction project outcomes in Malaysia. Design/methodology/approach – Based on the literature review, a questionnaire was designed containing 14 relational practices that were identified and grouped under five relational norms. Using a survey questionnaire, data were collected from clients, consultants and contractors in Malaysia’s construction industry. In-depth interviews were conducted to validate the statistical findings. Findings – When contracts are adjustable to address uncertainties, the projects concerned have better cost and quality outcomes. A better schedule outcome is correlated with coordinating and monitoring plans jointly. Open communication and sharing trustworthy project information have been found to produce better client-consultant and consultant-contractor relationships at the end of a project. When parties maintain a social relationship outside of a project, relationships between clients, contractors and consultants also improve significantly. Research limitations/implications – The findings are not easily generalisable due to the relatively small sample size, low response rate and the data being collected from only three regions in Malaysia. Practical implications – Clients need to take the lead in adopting relational practices, as these may give rise to warmer relationships and better project outcomes. Showing too much commitment and flexibility may harm the project schedule because of the frequent changes. Originality/value – This study found that the theory of relational contracting norms applies to Malaysia’s construction industry. The parties do not rely strictly on contract conditions but embrace role integrity, preserve relations and harmony to avoid relational conflict, and achieve their goals through proper means.
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HAN, Dan. "關係契約視野下的婚姻家庭." International Journal of Chinese & Comparative Philosophy of Medicine 16, no. 2 (January 1, 2018): 41–44. http://dx.doi.org/10.24112/ijccpm.161646.
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LANGUAGE NOTE | Document text in Chinese; abstract in English only.According to relational contract theory, the parties in a marriage and family should not only respect the independence and autonomy of the parties, but also shape the unity of the parties. This constitutes a paradox of modern marriage and family. Contractual intimacy can be expressed in many forms, and can even be expressed freely without form. However, the phenomena of marriage and family life are by no means merely contracts of relations; they are just as much about ideas as about facts.DOWNLOAD HISTORY | This article has been downloaded 69 times in Digital Commons before migrating into this platform.
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Qian, Liping, Yiyao Wang, and Pianpian Yang. "Do control mechanisms always promote collaborative performance: the role of formal institutions and business ties." Journal of Business & Industrial Marketing 35, no. 11 (April 20, 2020): 1871–86. http://dx.doi.org/10.1108/jbim-07-2019-0342.
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Purpose This paper aims to examine the effectiveness of control mechanisms in promoting collaborative performance by exploring the moderating effects of formal institutions (government support and legal enforcement in this study) and informal ties (business ties in this study) on the relationship between control mechanisms and collaborative performance. Design/methodology/approach A conceptual model is developed with the direct effects of contractual execution and relational norms on collaborative performance and the moderating effects of government support, legal enforcement and business ties on the above relationships. Hierarchical regression analysis is used to test the hypotheses based on 393 responses from Chinese computer and computer components distributors. Findings The empirical results generally support the conceptual model. First, consistent with most previous studies, both contractual execution and relational norms contribute to collaborative performance. Second, government support and business ties weaken the role of contractual execution, whereas legal enforcement strengthens it. Third, business ties enhance the effects of relational norms, and, unexpectedly, government support also fosters the relationship between relational norms and collaborative performance. Originality/value First, this study solves the problem of conflicting findings on the relationship between contract and performance by examining the effect of contractual execution, rather than contract design, on collaborative performance. Second, this study contributes to institutional theory by examining the moderating role of formal institutions. Third, this study deepens the understanding of the role of business ties by exploring its moderating effect on the relationship between control mechanisms and collaborative performance.
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Farina, Marco, and Demetrio Maltese. "Theory of the Firm and Organisational Contracts: The Remedial Aspects of Good Faith." European Business Law Review 27, Issue 1 (February 1, 2016): 51–83. http://dx.doi.org/10.54648/eulr2016003.
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The aim of this paper is to investigate which conceptual place long-term contracts have within the legal system and how the theory on relational contracts fits within a general theory of justice that has an objectification in a doctrine of good faith. We present a definition of commercial long-term contracts and give examples as to understand how, within the wide range of contracts that can fall within this definition, some can have an organisational colour. After this, we examine the good faith doctrine as understood and employed in both common and civil law jurisdictions; the paper provides the analysis of a recent civil law case involving a distributorship agreement and the function of abuse of right. Nevertheless, the focus is mainly on good faith as a generally accepted clause in European jurisdictions, that is paving its way to general acceptance in common law jurisdictions too. Lastly a brief explanation on how law and economics can help us in descriptively understanding the interplay between contract law and trust games is given, so as to have also a normative insight on why granting judges such a discretional power does not only achieve justice and fairness but also efficient outcomes for business players.
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Schulz, Karen M. Bradshaw. "Agency Coordination of Private Action." Texas A&M Law Review 6, no. 1 (October 2018): 229–58. http://dx.doi.org/10.37419/lr.v6.i1.9.
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This Article explores the previously overlooked role of relational contracting in forming and maintaining public-private partnerships. Relational contracting generally describes firms using formal but legally non-binding agreements to collaborate on shared objectives. Why do parties invest in forming elaborate contracts that they do not—and cannot—enforce in court? Contract theory suggests that the very act of contracting is relationship-building; it generates commitment, trust, cooperation, a win-win philosophy, and strengthened communication. Writing down goals and intentions allows parties to clarify expectations while maintaining flexibility for unforeseen conditions. This Article demonstrates that agencies also use relational contracting— creating unenforceable written agreements to build relationships with external actors. To shed light on agencies’ use of relational contracting, this Article provides a novel review of the recovery planning process required by the Endangered Species Act. A surprising finding emerges: private groups are providing crucial resources and logistical support to prevent the extinction of endangered species. Tribes, states, nongovernmental organizations, and sportsmen’s groups are providing necessary resources to further agency action. By orchestrating private action through recovery planning documents, the agency can garner the resources necessary to undertake species translocations, which it could not unilaterally facilitate. Although the plans are not judicially enforceable, they nevertheless play a coordinating and commitment-generating role in facilitating private actors to engage in recovery efforts. This example highlights the broader trend of relational contracting building and formalizing relationships between agency and non-agency actors. Environmental impact statements, forest management plans, and recovery plans for endangered species are all examples of such “relational contracts” governing inter-agency and private-public collaborations. Viewed in this light, seemingly prosaic planning documents are, in fact, a crucial component in facilitating many agency collaborations. Descriptively, this account adds institutional detail to literatures on new governance and public-private partnerships. Normatively, it raises questions about whether the benefits of contracting offsets the potential distributional inequities and mechanisms to shroud government actions created by the practice.
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Zhang, Lin. "Comparative Corporate Governance and Transaction Costs: Implications for China." Business Law Review 40, Issue 5 (September 1, 2019): 186–93. http://dx.doi.org/10.54648/bula2019025.
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Comparative study is significant for the reform of corporate governance in transitional economies like China. Influenced by the Berle- Means problem, this kind of study is usually under the auspices of the agency theory. However, besides the agency theory, another important theoretical framework to examine corporate governance is transaction cost economics. Based on transaction cost economics, it demonstrates that the governance structure of Japanese vertical keiretsu may promote the enforcement of relational contract other than the function to monitor the performance of managers. This understanding has positive implications for the Venture Capital (VC)-backed strategic alliances in China.