Contracts as trust builders

Abstract

Cooperative relationships require trust. Trust, on the other hand, requires a framework, i.e. an environment, in which it can be built. Numerous studies have focused on the antecedents of trust. For example, various trust-building factors have been identified in these studies. However, there is no comprehensive study exploring the ways in which contracts support the trust-building environment. This study attempts to fill this gap by drawing on the notion that contracts have a framing effect on trust, thereby creating an environment that can lead to trust building. The study entails an analysis of eight contracts made between the Finnish Defence Forces and its civilian contractors. The analysis is theory-driven and applies a framework of trust-building factors. The conclusion of the study is that the contracts support the environment by defining roles and responsibilities, relevant legal regulation, communication processes, and forums for interaction. However, trust building would benefit if contracts were improved in five ways, namely by establishing fewer forums of communication, encompassing personal relations and potentially deviating interests, providing more communication via avenues other than key personnel, carefully considering the need for restrictive confidentiality clauses, and using contracts to pursue a certain culture.