Relational Contracts: your questions answered
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:
- Why are so many lawyers opposed to the use of relational agreements?
- 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?
- 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?
- Are industry codes or standards a better alternative to individually negotiated relational contracts?
- 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?
- 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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