Networks of contracts serve mainly as a long-term form of organisation, both features being typically combined. This combination—the so-called organisational contract—is seen as a hybrid between market and firm. There are different explanations for its existence and two are particularly prominent. Williamson sees them as a governance device to cope with the problem of uncertainty of future events, namely in situations where one party has invested in a particular relationship more than the other and therefore is ‘more dependent’ on its continuance. Conversely, Powell sees them as a scenario where neither command nor anonymous exchange dominate, but mutual (often personalised) trust and reciprocity based on strong mutual knowledge of the partners are marked. These two explanations imply how fascinating the organisational contract may be for decision theory and the law. This chapter addresses the phenotype of (long-term) networks of contacts and sees a large variety of them ranging from rather standardised to highly tailor-made arrangements, which implies a heterogeneous basis for decision-making theories and their application. With respect to decision-making theories that are considered in the second section, the chapter takes a broad perspective. While it may be attractive to apply mainly one decision theory to the phenomenon, the chapter asks which decision theories might have particular explanatory value. Thus, a broader survey on a multifaceted compound of theories might be particularly suitable for the heterogeneous aspects of the phenomenon. The chapter also addresses the question of which repercussions the discussed decision theories might have in law.
A tale of two citizens: The Brey-Dano proportionality gap in UK courts and tribunals
