Law Commons^™

A Paradigm Shift In Comparative Institutional Governance: The Role Of Contract In Business Relationships And Cost/Benefit Analysis, Juliet P. Kostritsky

Faculty Publications

Stewart Macaulay’s research on the ways that Wisconsin manufacturers transact debunked the centrality of contract law by revealing a disinclination to consult contract documents or invoke legal sanctions. This research revolutionized contracts scholarship, highlighting that a contract, instead of being viewed as an inevitable necessity of exchange, should be viewed as one of many institutions that might be available to parties as a solution to problems and a method for facilitating exchange. Macaulay’s research further revealed that the cost of legal sanctions, the importance of maintaining business relationships, and the desire for informal solutions actually push parties to conclude that …