Relational contract theory was originally developed in the United States by the legal scholars Ian Roderick Macneil and Stewart Macaulay.
Relational contract theory was originally developed in the United States by the legal scholars Ian Roderick Macneil and Stewart Macaulay.
Thus, even the simplest transaction has a good deal that is unstated and dependent on a wider web of social and economic relations.
Furthermore Austen-Baker explains the benefit of a long-term and meaningful relationship as parties will be better able to understand and advise each other for their specific needs.
Some forms of business require high levels of trust which is hard to establish therefore encouraging relational contracts.
It is also worth mentioning the distinct approaches of Ronaldo Porto Macedo Jr. (Brazil), who has dealt with the theory in the field of consumer protection law,[14][15] and Pedro Proscurcin (Brazil), who has introduced the theory of activity contracts in the field of labor law.
[16] Still in the field of labor law, the most recent works of Douglas Brodie (Scotland),[17][18] Hugh Collins (England)[19] and Anthony Davidson Gray (Australia)[20] deserve to be highlighted.
The white paper, outlines basic tenets that are foundational to relational contracting, including communication, risk allocation, problem-solving, no-blame culture, joint working, gain and pain sharing, mutual objectives, performance measurement and continuous improvement.
[21] In 2019, David Frydlinger, Oliver Hart and Kate Vitasek collaborated on a Harvard Business Review article, "A New Approach to Contracts: How to Build Better long-term strategic partnerships".
The Nobel laureate Oliver Hart's foreword in the book notes, “…for a long time I have felt that the traditional approach to contracts, where lawyers try to think of all the possible things that can go wrong in a relationship and include contractual provisions to deal with them, is broken.” Hart added that it “never worked that well, and in an increasingly complex and uncertain world it works even worse.”[23] The book provides a comprehensive review into the history and theory behind relational contracting and provides a practitioner’s perspective that includes a five-step process for developing a relational contract: