Contract Law, Relational Contracts, and Reputational Networks in International Trade: An Empirical Investigation into Cross-Border Contracts in the Software Industry
Article first published online: 29 DEC 2011
© 2011 American Bar Foundation.
Law & Social Inquiry
Volume 37, Issue 1, pages 25–57, Winter 2012
How to Cite
Dietz, T. (2012), Contract Law, Relational Contracts, and Reputational Networks in International Trade: An Empirical Investigation into Cross-Border Contracts in the Software Industry. Law & Social Inquiry, 37: 25–57. doi: 10.1111/j.1747-4469.2011.01281.x
- Issue published online: 23 FEB 2012
- Article first published online: 29 DEC 2011
The following case study investigates the contract enforcement institutions that enable German customers to purchase software in Asia and Eastern Europe. The case study shows that nation-states are hardly able to generate a legal “shadow” for cross-border business relations. The same holds true for the so-called New Lex Mercatoria. Instead, economic actors create their own informal mechanisms. Relational contracts and reputational networks are nowadays far more effective due to developments in the field of information and communication technology. Overall, the importance of formal contract law in international trade is even smaller than is assumed by the classic theory of relational contracts.