relational contracts

Relational contracts are informal or long-term agreements between parties based on mutual trust, reputation, and ongoing understanding, rather than detailed written terms. They rely on values like cooperation, loyalty, and flexibility, allowing the parties to adapt as circumstances change. These contracts often govern relationships where the history and connection between parties influence their commitments, such as within a family business or long-term supplier relationships. Unlike standard contracts, relational contracts emphasize the quality of the ongoing relationship over specific legal obligations, fostering cooperation through trust rather than rigid enforcement.