Relational contract

About: Relational contract is a research topic. Over the lifetime, 454 publications have been published within this topic receiving 24079 citations.

Smoke, Mirrors & Contract Law

Abstract: Contract law is set up to be transaction enforcing, that is, to be binding. Binding means two different but related things. First, “binding” means that the contract is valid as between the parties (because it satisfies contract law’s formation requirements) and, second, it means that the rights and obligations set forth in that contract will be enforced by the state on behalf of one of the parties over the objection of the other, now resisting party. Modern contract law uses several well-established assumptions about the contracting parties, including the way they behave when contracting, and the roles of the market and state, to justify binding people to their contracts. The problem with making contracts binding, however, is that all of the assumptions are wrong both theoretically and in practice. They are wrong in theory as the work of the Legal Realists, Critical Legal Studies scholars, relational contract theorists and, more recently, behavioral law and economics scholars show. They are also wrong in practice as an examination of a subprime mortgage loan hypothetical, one that implicates disclosure statutes, will demonstrate. Because the assumptions are wrong, modern contract law cannot justify holding parties to their contracts. Nevertheless, contract law continues to do just that. Consequently, continuing to bind parties to their contracts, absent the justification that the assumptions provide, is an unmitigated exercise of state power. Contract law’s formation rules and disclosure statutes help justify this grant of power by masking the power imbalance embedded in the modern contract law system and by diverting critical attention and analysis away from that system as a whole. As a result, making contracts binding comes with unacknowledged costs, all of which work to the detriment of parties with less bargaining power, regardless of whether they are individuals or business entities. Specifically, the extent of state power that actually exists within the modern contract law system and its uses are concealed. As a specific consequence, unequal bargaining power becomes institutionalized within the system such that the party with superior bargaining power can, if it so chooses, impose bad bargains on its contracting partners with impunity. Exploring the premise that contracts are made Professor of Law, Southwestern Law School; LL.M. Harvard Law School; J.D. William S. Richardson School of Law, University of Hawaii; B.A. Whitman College. This article benefitted greatly from a presentation at the 2005 AALS Mid-Year Meeting on Contracts and Commercial Law in Montreal, Canada, the Joint Western Law Teachers of Color and Conference of Asian Pacifica American Law Faculty Conference at the Unviersity of Denver Sturm College of Law, April, 2008, and the Spring Conference on Contracts at the University of Las Vegas William S. Boyd School of Law, February, 2010. Southwestern Law School provided generous research support. My sincere thanks go to Jay Feinman, Katherine Sheehan, David Fagundes, Gowri Ramachandran, Nancy Kim, Michael Dorff, Arthur McEvoy, Hila Keren, Roman Hoyos, Ronald Aronovsky, Keith Aoki, Thomas Joo, Eric Yamamoto, Paul Horwitz, and Dean Bryant Garth for reading and commenting on various drafts of this article. Thanks also go to my research assistants Aaron Power, Jose Arambulo, Daniel Csillag, Georgina Lepe, Erika Tarankow, Matthew McAleer, Stephanie Foster, Natalie Rodriguez, Margaret Leidy, and Lilit Tovmasyan. Smoke, Mirrors & Contract Law 2 binding thus allows us to see the powerful role that the state plays in creating and maintaining a deeply flawed contract law system, one in which imbalances of power, not freedom and consent, are the hallmark. These imbalances are so deeply embedded that even mediocre remedial efforts, like disclosure statutes, reify rather than mitigate them. This result should be troubling for contract scholars and others who adhere to the notion that freedom and individuality are epitomized in the freedom of contract ideal. Introduction 2 II. Binding Contracts 10 A. The Modern Contract Law System 10 B. Disclosure Statutes as a Modern Contract Remedial Tool 20 III. Contracts and State Power 25 A. The Assumptions in Theory and in Practice. 25 1. The Market is Not Self-Regulating or Largely Outside of State Control 25 2. Contracts Are Not Voluntary 32 3. Contracts Are Public, Not Private 36 4. The State's Role is Neither Nor Minimal and, Therefore, Contracts Are Not Just Between Two Private Parties 38 5. Individuals Do Not Act Rationally in the Marketplace, Nor Are Contracts the Product of Informed Choice 38 6. Parties Do Not Bargain At Arm's-Length and They Are Not Most Likely Strangers to One Another 43 B. The Universe of Contracts 48 IV. Contracts and Unequal Bargaining Power 52 A. Synergy: State Power and Unequal Bargaining Power 53 B. Institutionalizing Unequal Bargaining Power 54 C. Smoke and Mirrors 60 V. Conclusion 63

Research on Relational Contract ofInternational Operation oftheExtroversive Enterprises

Abstract: Withthetheory ofrelational contract as the focuspoint,thispaperexpoundsfour internationalize d operation strategies ofenterprises, such asthespotmerchandise imports andexports transaction, producing abroad, packaging andsupplying relationship aswellasthelocalization. Thefourstrategies havetheir specific rangeofapplication andcondition separately. Thegovernment andnongovernmental organizations supplyandimprovesystemenvironment of the enterprises continuously makingfortheenterprises improve their expectation ofthemarkets. Therefore the internationalized operating strategies ofenterprises result inthedynamicevolution, whichcanreducethe efficiency lossfromthevarious tradefriction and increase thesocial welfare continuously.

Collaborations in the Modern Economy

Abstract: In the modern world, there is a new socio-economic phenomenon, which is called collaboration. Collaboration is understood as the association of two or more people for the joint implementation of innovative directed activities in the form of a project. Although this phenomenon appeared relatively recently, in practice, such associations have been present in the economy for a long time. These are innovative public-private partnerships, technology parks, strategic scientific alliances, etc. There are many types and forms of collaboration that involve both legal entities and individuals. The collaboration differs significantly from the usual organization, and, first of all, in that its participants share a common goal, and informal relationships prevail within the collaboration. It is advisable to consider the collaboration from institutional theory as a relational contract for interspecific resources. That is, we are talking about a contract. At the heart of which, there are no legal relations, or they are minimized, and its resources (people) are unique and mutually reinforcing.

Research on Relational Contract of International Operation of the Extroversive Enterprises

Abstract: With the theory of relational contract as the focus point, this paper expounds four internationalized operation strategies of enterprises, such as the spot merchandise imports and exports transaction, producing abroad, packaging and supplying relationship as well as the localization. The four strategies have their specific range of application and condition separately. The government and nongovernmental organizations supply and improve system environment of the enterprises continuously making for the enterprises improve their expectation of the markets. Therefore the internationalized operating strategies of enterprises result in the dynamic evolution, which can reduce the efficiency loss from the various trade friction and increase the social welfare continuously.

The Analysis of the Specific Logistic Ability Investment Based on Relational Contract in the Port Supply Chain

Abstract: This essay introduces the relational contract and analyses its automatic executive condition. By solving the planned mode, the designed optimal relational contract can realize the optimal specific logistic ability investment of the port supply chain if the discount factor can meet the value in a certain range.