Contract Governance – A Draft Research Agenda

Abstract

While the concept of governance had originally been developed in Williamson's seminal article with a view to the “governance of contractual relations”, it has ironically not received much attention in general contract law theory so far. This paper aims at developing potential perspectives that might arise from governance research in the field of contract law. Contract governance appears to be an important and indeed necessary complement to corporate governance. Contract and organisation are distinct forms of cooperation, yet, they are complementary and, in some cases, contract and organisation can be alternative instruments for the same goals. Moreover, the market mechanism as such requires an organisational framework which may exert an influence on market results and which is open to a governance analysis. Contract governance opens up the perspective for its various incentives and regulatory mechanisms. In that respect, governance research goes beyond traditional contract law theory: It contributes to “better” regulation, for example by helping to avoid misdirected regulation and counter-intentional effects. Contract governance may thus help preserving individual freedom as it may contribute to less intrusive regulation.