Relational Contract

A relational contract is an informal, ongoing agreement between parties that relies on mutual trust, norms, and understanding rather than detailed written terms. Unlike traditional contracts with fixed obligations, relational contracts emphasize flexibility, cooperation, and a long-term relationship. They are common in situations where the nature of work or cooperation evolves over time, such as partnerships or employment relationships. The key idea is that the parties expect fair treatment and good faith, allowing for adaptability as circumstances change, which helps maintain a positive and productive relationship beyond strict legal commitments.