Abstract
Recent scholarship has started to recognize the need to understand the role of contracts in processes of circular business model innovation, particularly in Product Service Systems (PSS) business models. Ownership, usage right and risk allocation are key aspects of contract design, all influencing circular business model innovation. However, current knowledge of how contracts support emerging circular business models is limited. In this paper, we address this gap by presenting an in-depth analysis of a case study drawing on data stemming from the Fairphone-as-a-Service project to define key elements for a Circular Service Contract Template. Our findings support the idea that contracts, ownership, and usage right issues strongly influence the core elements of a PSS business model, such as servitization, longevity and modularity. Particularly, evidence from the case study confirmed the presence of tensions between ownership and contractual aspects when attempting to manage the circular business practices.
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