General Content of Management Contracts

20 Pages Posted: 16 Jun 2010

See all articles by Michael D. Diathesopoulos

Michael D. Diathesopoulos

Tilburg Law and Economics Center (TILEC); University of Cambridge - Faculty of Law; Leicester Law School

Date Written: June 15, 2010

Abstract

This paper presents management contracts (contracts under which corporate management is assigned to another company) as relational contracts, i.e. contracts to which relational contracts theory may apply and explain their character and specific features.

We present the key concept and benefits behind management contracts, the role of the provider and its fiduciary duties and the specific and sui-generis relation developed between the parties and characterised by increased trust, interdependence, incompleteness, renegotiation, permanent and active cooperation, merge of managerial structures and incomplete allocation of powers and duties.

Finally, we summarise the key factors that define each specific relation's particular depth, scope and relational element, thus underlining the strong relational character of such contracts. This relational character make them suitable for an experimental application of relational contracts theory key ideas and content.

Keywords: Relational Contracts, Relational Norms, Inter-Organisational Trust, Reputation, Business Cooperation, Management Contracts, Incomplete Contracts, MacNeil, Renegotiation, Contract Law, Outsourcing Contracts, Fiduciary Duties, Implied Terms

JEL Classification: K12, K20,K22, L20, L22, M10, M13

Suggested Citation

Diathessopoulos, Michail D. and Diathessopoulos, Michail D., General Content of Management Contracts (June 15, 2010). Available at SSRN: https://ssrn.com/abstract=1625363 or http://dx.doi.org/10.2139/ssrn.1625363

Michail D. Diathessopoulos (Contact Author)

Tilburg Law and Economics Center (TILEC) ( email )

Warandelaan 2
Tilburg, 5000 LE
Netherlands

University of Cambridge - Faculty of Law ( email )

10 West Road
Cambridge, CB3 9DZ
United Kingdom

Leicester Law School ( email )

University Road
Leicester LE1 7RH, LE1 7RH
United Kingdom

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