relational contract theory

Relational contract theory emphasizes that many business agreements extend beyond formal written contracts, relying on ongoing relationships, trust, and mutual understanding. Instead of focusing solely on specific terms and legal obligations, parties expect flexibility, cooperation, and commitment over time. These relationships are built on shared intentions and social norms, which help adapt to changing circumstances. This approach recognizes that long-term partnerships often depend on goodwill and communication rather than rigid contract rules, fostering stability and collaboration in complex, evolving business environments.