Relationalism: Construction contracting under the People's Republic of China contract law

Construction activities involve numerous parties and can be viewed as a complex bundle of interesting contractual relationships. Achieving contract objectives requires a heavy information exchange within the complex web of contracts. The mutuality and interdependence cannot be nurtured without a cooperative environment under which trust can be fostered. Construction contracts are highly relational and flexibility for adjustment is essential to preserve the relationship in the event of unexpected contingencies. Such flexibility invites disputes if it is used abusively, thus requiring the service of relational dispute resolution. With the perspective accession of China to the World Trade Organization, a significant increase in investment in the PRC is anticipated. When one is called upon to select a contracting system, both cultural considerations and the PRC Contract Law suggest the use of relational contracts that are characterized by a cooperation environment, flexibility for adjustment, and relational dispute resolution.