Contractual Effects on Trust in Interorganizational Relationships

Abstract

The analysis of the effects of contracts on trust in interorganizational relationships remains a topic surrounded by many uncertainties. In order to develop a thorough understanding of these effects, this chapter reviews the evolution of research on the matter. This study differentiates between the objective and subjective analyses. In the objective analysis, the effects of a contract on trust are determined by the very existence of the contract. By contrast, a subjective analysis emerges in more recent works, exploring the impact of the contractual content on trust levels. The presentation of these analyses also leads to exposing their limitations and to proposing other avenues of research for future work on this subject. In this regard, the chapter engages with Fabrice Lumineau’s contributions to the field, particularly his distinction between calculative and noncalculative trust judgments. By integrating insights from transaction cost economics, relational contract theory, and governance frameworks, this analysis provides a nuanced understanding of how firms can strategically design contracts to balance legal safeguards and relational trust. The findings contribute to ongoing discussions in Law & Management, offering practical implications for organizations seeking to optimize contractual strategies in complex business environments.