The Richness of Contract Theory

This essay is a review of The Richness of Contract Law: An Analysis and Critique of Conemporary Theories of Contract Law by Robert A. Hillman (1997). Throughout the book, Hillman offers a number of useful insights about various issues of contract law and theory--as he has in his numerous law review articles--but in this review the author is concerned with his overall theme: a general skepticism about unifying or highly abstract contract theories that fail to mirror the richness of contract law. In this regard, Hillman stands in the realist tradition of the previous generation of contracts scholars. Hillman attempts to justify this stance by examining a number of doctrinal contexts: contract formation, unconscionability, and good faith. Hillman considers a variety of theoretical approaches: promise theorists, reliance theorists, feminist theorists, efficiency theorists, relational theorists, and critical legal scholars

Evaluation of a Hybrid Seed Contract Between Smallholders and an MNC in East Java, Indonesia

Three hundred smallholders near Malang in East Java were surveyed of whom 150 were participating in a hybrid seed contract with Pioneer Hybrid International Inc, an American MNC that has been contracting in the area since 1986. The objectives of the study were to determine whether the contract improved the welfare of those who participated and, if participation did improve welfare, to evaluate why this contract, in contrast to many other farm contracts in developing countries, is successful. A transaction cost framework was used to specify a framework for probit analysis of contract participation and regression analysis used to measure the contribution made by contract participation to gross margins. The empirical results suggest (i) contract selection was by Pioneer and not through self-selection, (ii) the contract is likely to favour larger farmers and (iii) the Pioneer contract improved returns to farm capital and hence was likely to be welfare improving for contractors. The success of the contract over many years was attributed to the nature of the contracting process which was between Pioneer and grower groups and not at the individual smallholder level.Farm Management,

Penalty and reward contracts between a manufacturer and its logistics service provider

Contracts are used to coordinate disparate but interdependent members of the supply chain. Conflicting objectives of these members and lack of coordination among the members lead to inefficiencies in matching supply with demand. This study reviews different types of contracts and proposes a methodology to be used by companies for analyzing coordinating contracts with their business partners. Efficiency of the contract is determined by comparing the performance of independent companies under the contract to the supply chain performance under the central decision maker assumption. We propose a penalty and reward contract between a manufacturer and its logistics service provider that distributes the manufacturer’s products on its retail network. The proposed contract analysis methodology is empirically tested with transportation data of a consumer durable goods company (CDG) and its logistics service provider (LSP). The results of this case study suggest a penalty and reward contract between the CDG and its LSP that improves not only the individual firm’s objective functions but also the supply chain costs. Compared to the existing situation, the coordination efficiency of the penalty and reward contract is 96.1 %, proving that optimizing contract parameters improves coordination and leads to higher efficiencies

CONTRACT INCENTIVES AND EXCESSIVE NITROGEN USE IN AGRICULTURE

This study examines incentives for input use under tournament contracts. We analyze implications of contract design for nitrate-based environmental externalities generated by agricultural producers. Outcomes are compared from contracts awarded by tournament to those from fixed-payment contracts. Our findings show contract insecurity can distort input use. The model developed in this analysis is applied to a region of the U.S. where tournament-based production is prevalent and groundwater contamination is a problem. We find contract insecurity increases nitrogen use by about 12%, resulting in a 17% increase in nitrate leaching. Implications for contract modification to reduce environmental externalities while maintaining contract incentives are discussed.Crop Production/Industries,

Contractual Relations in the Production and Marketing of Potatoes, Barley, and Wheat in Idaho: A Procedure for an Empirical Analysis

This paper develops a procedure for a comprehensive analysis of contractual relations in the production and marketing of potatoes, barley, and wheat in Idaho. The procedure focuses on analysis of contract choice by agricultural producers, processors and distributors; evaluation of the effectiveness of contract provisions; and analysis of the behavior of contract parties. The paper presents a review of related literature and a plan of activities to be performed, including the data-collection methods and the types of analyses to be used. The suggested methodology can be used to conduct a similar analysis in any agricultural-commodity market.Crop Production/Industries, Marketing,

A methodological approach to developing a measure of the psychological contract for managers

With a focus on a specific employment group this research attempted to add to the knowledge on the content of the psychological contract. Structured interviews with 35 managers generated 651 responses relating to the content of their psychological contracts. Analysis of those responses resulted in the development of an initial two-component measure of the contract. One component (23 items) included the managers' expectations relating to the organisation's obligations. The other component (16 items) included the managers' obligations relating to the perceived organisation's expectations. Validation of the measure was based on a questionnaire completed by 124 managers. Participants considered all items to be important aspects of the contract. Participants also rated as high the obligation of each party to meet the expectations of the other. Factor analysis of the measure revealed two factors in each component which, in line with previous research, were termed relational obligations and transactional obligations. A robust methodology is proposed for continuing research into the content of the psychological work contract

External Sovereignty and International Law

This essay addresses the need to redefine current notions of sovereignty. It returns to earlier concepts of subjects joining to receive the benefits of peace and security provided by the sovereign. It diverges from most contemporary commentary by avoiding what has become traditional second-tier social contract analysis. In place of a social contract of states, this redefinition of sovereignty recognizes that international law in the twentieth century has developed direct links between the individual and international law. The trend toward democracy as an international law norm further supports discarding notions of a two-tiered social contract relationship between the individual and international law

Contract farming and its implications for input-supply, linkages between markets and farmers in Karnataka

This study is focused on the economic analysis of contract farming with a comparison of income, access to technology and credit of contract and non-contract farmers. The advantages of contract farming for smallholders have also been evaluated. In contract farming, quality inputs such as seeds, fertilizers and plant protection chemicals are provided to the farmers at their farm gate, coupled with the technical advice on production aspects. This not only reduces the working capital needs of farmers but also substantially reduces their transaction cost per unit of output. Borrowing of crop loans has been found 33 per cent higher by non-contract farmers than contract farmers, as the former have to buy material inputs. The net returns have been found higher for contract than non-contract farmers. Within contract farming, net returns have been recorded higher under domestic than foreign contracts for both baby corn and chilli. In the case of non-contract farmers, the net returns (Rs 3,035) have been found less than one-third of domestic contract farmers (Rs 10,610) and slightly more than one-third of foreign contract farmers (Rs 8,050). In the case of chilli also, the net returns realized per acre have been recorded maximum under domestic contract farmers, followed by foreign contract farmers and non-contract farmers. The returns per rupee invested have been noted higher in farming of baby corn in all the three categories than those of chilli farming. The constraints identified in the study include delay in payment and delivery of inputs, delay in lifting the produce, access to seeds, manupulation of grades by the buyers, and high cost of inputs in contract farming. Factors inducing farmers into contract are: low initial investment, better price for the produce, access to market, technical support on package of practices, access to inputs and easy transportation facilities.Farm Management,

The Content of the Psychological Work Contract for Frontline Police Officers

Adding to the field of knowledge on the content of the psychological work contract, structured interviews with 35 frontline police officers generated 662 responses relating to the content of the psychological work contract for this employment sector. Analysis of these responses resulted in the development of an initial two-component measure of the contract. One component (17 items) reflected the obligations arising from the promises officers believed the organisation had made to them. The other component (19 items) reflected the obligations arising from the promises officers believed they had made to the organisation. The measure was included in a survey completed by 84 frontline police officers. Factor analysis revealed two factors in each component. For the organisation's obligations component, one factor reflected obligations related more to the organisational environment, whereas the other factor reflected obligations related more to the job environment. For the employee's obligations component, one factor reflected obligations related more to behaviours on the job, whereas the other factor reflected obligations related more to the pursuit of development opportunities. The nature of the relationships that emerged between the psychological contract and the nomological network variables included in the study provide strong support for the validity of this measure of the psychological contract