I am excited to announce that I will be speaking at tonight’s 2021 Virtual Academic Symposium on “Relational Contracting: Theory and Practice” which is being jointly conducted by The Center for Corporate Reputation at Said School of Business, University of Oxford, the Stigler Center at the University of Chicago, the Becker-Friedman Institute at the University of Chicago, the Relational Contracts Workshop and World Commerce and Contracting. You can get more detail here.
Specifically, I have asked to give provide some insight into our (Australian Defence Sector) Generation 3 Performance Based Contracts and how we moved from a contract architecture focused on the delivery of individual, transactional outputs to one that focused on the delivery of collective, strategic outcomes. That is moving from suppliers to partners.
This links neatly to the first perspective which was developed by Oliver Hart, David Frydlinger and Kate Vitasek who put forth a new type of contract—the formal relational contract—that they view as an effective way to overcome the problems of contractual incompleteness, particularly in complex transactions. This approach highlights the importance of aligning perspectives as well as building trust and understanding during contract negotiation. It also suggests that contracts contain a legally binding obligation to act in accordance with six contracting norms—reciprocity, autonomy, honesty, integrity, loyalty and equity—to induce the parties to respond cooperatively to the inevitable problems arising from contractual incompleteness.
I am honoured to be a part of this discussion which includes recognised global thought leaders Oliver Hart (2016 Winner of the Nobel Prize in Economics with Bengt Holmström for their work on contract theory), David Frydlinger, Kate Vitasek, Douglas Baird and Henrik Lando.
Wish me luck!