Contract Adjudication in a Collaborative Economy
Posted: 4 Jun 2008 Last revised: 21 Aug 2009
Date Written: January 24, 2009
In order to explore the debate between contextualist versus formalist contract interpretation, this article examines dispute resolution procedures in a novel class of contracts: agreements governing inter-firm collaboration. Analysis of these contracts reveals two phenomena: first, agreements governing collaboration include arbitration clauses more frequently than other commercial contracts; and second, these agreements routinely situate arbitration at the summit of complex escalation procedures. These observations raise, in turn, the following inter-related questions: first, why do collaborators avoid litigation; and second, what makes escalated and private dispute resolution appropriate?
The article's central claim is that litigation is shunned because contemporary contextualist contract law poorly interprets the meaning of collaborative activity. Note, however, that neither contextualism's deficiencies nor the prevalence of arbitration may necessarily suggest a return to formalism: formalism's standard justifications appear problematic when applied to collaborative production relationships. Thus, this article considers the possibility of transcending the debate between contextualist and formalist enforcement, finding some promise in the application of the experimentalist model of adjudication, theorized to describe current trends in public law litigation, as a template for modern contract enforcement.
Keywords: collaboration, contract enforcement, formalism, contextualism, experimentalism
JEL Classification: K12, L14, O32
Suggested Citation: Suggested Citation