The cognitive-perceptual conceptualisation of the psychological contract has dominated research in this field. In this paper, it is argued that locating the psychological contract at the level of the individual-organisational relationship can offer rich insights into psychological contract dynamics. Using qualitative interview data from a research study exploring how managers and part-timers deal with the transition from full to part-time police work in the UK, it is argued that a multi-perspective conceptualisation of the sources of the psychological contract is critical for understanding processes that lead to non-mutuality of understandings. Specifically, it is argued that the institutional and organisational context, embedded in the actions of third parties and in management practices, can undermine the extent to which the manager and the employee can reach agreement about mutual obligations. The theoretical and policy implications of this position are developed. Copyright © 2006 John Wiley & Sons, Ltd.