Proactive contracting
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In law and contract theory, proactive contracting is akin to proactive law and focuses on the same properties, namely to prevent problems and promote relationships among contract participants. The legal area of research developed in Scandinavia in the 1990s and has gradually gained attention.[1] Proactive contracting deals with contract management, risk management and business process management. The word proactive is the opposition to reactive and refers to acting in anticipation of future problems, needs, or changes.[2] Empirical studies on contracting capabilities[3] and research on dynamic capabilities[4] have shown that promoting proactive behavior in businesses can be advantageous.
One aspect of proactive contracting is the design of alternative dispute resolution (ADR) mechanisms to prevent escalation of disputes into litigation.[5] An ADR strategy limits the time and money spent by management on litigation. Thus, the costly disruption of litigation and the opportunity cost are limited.[6] In addition to preventing escalation of the dispute, proactive contracts allow the contracting parties to anticipate the next step of the resolution process, as the procedure has been contractually agreed.[7]
References[edit]
- ↑ Haapio, Helena (2006). "Business Success and Problem Prevention Through Proactive Contracting". SSRN.com. Social Science Research Network. Retrieved 2 April 2020.
- ↑ Proactive - Definition from Merriam-Webster Dictionary
- ↑ Haapio, H.: An Ounce of Prevention…- Proactive Legal Care for Corporate Contracting Success. (2007) Tidskrift utgiven av Juridiska Föreningen i Finland, 1/2007, pp. 39-68.
- ↑ Teece, D.J., Pisano, G. & Shuen, A.: Dynamic Capabilities and Strategic Management. (1997) Strategic Management Journal, vol. 18, no. 7, pp. 509-533
- ↑ Tieva, Antti; Junnonen, Juha-Matti (30 September 2009). "PROACTIVE CONTRACTING IN FINNISH PPP PROJECTS". International Journal of Strategic Property Management. 13 (3): 219–228. doi:10.3846/1648-715X.2009.13.219-228.
- ↑ http://pure.au.dk/portal-asb-student/files/55302637/Overcoming_the_Challenges_of_Future_Contracting_through_the_Use_of_Proactive_Law.pdf p. 39
- ↑ Sorsa K. (ed.): Proactive Management and Proactive Business Law – A Handbook. (2011) 1. ed., Turku: Tampereen Yliopistopaino Oy – Juvenes Print. p. 87.
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