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Relational Contracts: your questions answered

October 16, 2020

In preparation for the World Commerce & Contracting webinar on October 19th, we have been collecting questions from legal and commercial practitioners.

While there is a lot of interest in relational contracts, for many they remain a bit of a mystery. Our aim is to demystify and provide an objective view of when and how this form of contract should be used – or avoided. Among the questions we have received – and which will be answered during the webinar – are:

  1. Why are so many lawyers opposed to the use of relational agreements?
  2. Relational principles are often contained in a separate charter, or may even be embedded in some form of customary practice or operational process. What are the pro’s and con’s of formal contract versus informal charters or codes?
  3. Relational agreements typically apply in longer term and more complex situations where there is a high level of unpredictability and a need for collaborative working. Those situations often involve multiple parties. What makes sense from a contractual perspective – how are the relational elements best introduced – for example, via a teaming agreement?
  4. Are industry codes or standards a better alternative to individually negotiated relational contracts?
  5. Since relational terms govern operational performance and the users of those terms won’t be lawyers, what does this imply for the optimum structure and design of relational agreements?
  6. It has been suggested that relational principles are by nature incompatible with litigation. Does it make sense to eliminate the potential to litigate – for example through binding mediation or the use of an expert panel?

If you have questions you would like added to this list, please send them – and sign up to join us on 19th.

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