Contract en conflict: Strategisch Management van Inkooptransacties

Dissertation of the University of Utrecht The reality of business relations is opposed to the assumptions commonly held by legal experts on the role of contract law in society, or so Macaulay (see his classic 1963 study) would have us believe. Empirical studies Macaulay conducted in the United States in the 1950s and 1960s show that business transactions were not planned down to the last little detail or stipulated in contracts nearly as much as expected. If there were any problems or differences of opinion, contracts were rarely used to settle them. Even in the event of significant disputes, legal procedures were rarely resorted to, and only very few cases were put before a judge. As time passed though, reservations did arise as to Macaulay’s observations. In fact ‘The Transformation of American Business Disputing’ (Galanter, Macaulay, Palay and Rogers 1991), a large-scale research program headed by Macaulay himself, focused on whether the pattern he had described was still valid a few decades later. Influenced in part by the increasing volume and complexity of transactions and growing competition among firms, one might expect (see Galanter, Macaulay, Palay and Rogers 1991: 18-19) the image of business relations that entail informally settling important issues over a meal or a drink to have gradually eroded. The internationalization of economic traffic, and the growing spatial and sociocultural distance between companies accompanying it are also thought to have led to a change in the picture described by Macaulay. To an increasing extent, contracts were thought to be taken seriously in the business world, and disputes were thought to lead to legal procedures between companies. No matter how plausible this might seem in the first instance, it was not confirmed by later research in the field (see Dunworth and Rogers 1996 on the situation in the United States). The picture presented by Macaulay might still well be valid today (Macaulay 1996, see also Jettinghoff 2001: 17-18 and 55-58). This is striking in view of the unmistakably growing opportunities and stimuli for opportunism. Successful long-term cooperation between companies is no trivial matter (Raub and Tazelaar 2000: 20). A transaction partner can supply a lower quality or expend less effort than agreed upon, certainly if the other partner has no easy way of observing or monitoring it. So despite the stimuli for opportunism, and despite the lack of attention for detailed contractual planning, how is it possible that parties can nonetheless do successful business, and jointly solve whatever problems might come up without the help of contracts or third parties? In answering this general question in this book, I focus specifically on transactions between buyers and suppliers. I divide the management of these transactions into two hypothetical stages, an ex ante stage before the agreement is signed, and an ex post stage afterwards. Based on this division, I then distinguish three topics, and examine each of them separately and in conjunction with each other. The first topic is ex ante management, which is focused on preventing problems and designing damage control measures if they do occur. Regardless of all the planning input, in practice there can still be problems after an agreement is signed. The second topic is thus the performance of the supplier. I consider the extent to which there are problems in implementing the agreement. The third topic has to do with what happens after problems occur in the implementation of the agreement, and pertains to how problems are dealt with. The question on ex post management plays a central role here: How are problems dealt with, and what is done to reduce the damage