Global Order Beyond Law: How Information and Communication Technologies Facilitate Relational Contracting in International Trade

(Paperback)

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Well-functioning contract law is a crucial prerequisite for economic development. However, even though international trade has increased enormously in recent decades, we still know little about the contract enforcement mechanisms that exist in today's globalised markets. The aim of this work is to shed light on the governance of complex cross-border contracts by developing a comprehensive theoretical framework for understanding the relevance of both formal and informal institutions. This framework is then applied to an empirical study of cross-border software development contracts. Combining a unique data set of 41 qualitative expert interviews with statistical data and surveys, the author demonstrates that state contract laws show fundamental signs of dysfunction across borders. Companies engaged in globalised exchange therefore rarely use this mechanism. Even the European Union's supranational enforcement order is, in practice, insignificant. Against all expectations, international commercial arbitration also turns out to be limited in its ability to provide a workable legal infrastructure for global commerce. With global trade lacking a reliable formal legal order, companies have reacted by creating their own informal governance structures. This book explains how complex exchange in global markets has emerged in the absence of a global legal order.

Reviews

Professor Dietz has made an important and substantial contribution to the field of international law and economics. His analysis deserves a careful and respectful hearing. -- Paul H. Cohen * Transnational Dispute Management, August 2014 *
A study like the one presented in this book is highly interesting for research on the use of international trade law and the actual needs of traders Dietz presents a highly interesting spectrum of information about the actual problems and their solutions that business people encounter in this globalised world. -- Maren Heidemann * European Business Law Review *
Thomas Dietzs book will be enjoyable to any reader interested in contract law theory, in the specificities of complex software development agreements, in international commerce and trade, in sociological approaches to law, or in institutional economics, among other fields. Readers will find in Dietzs work a fascinating study of contract law in action that forces all of us to be less attached to formal contracting rules and to consider other alternative mechanisms that work in the shadow of contract law or in its absence. -- Antoni Rub-Puig * European Review of Contract Law *

Author Bio

Thomas Dietz is Associate Professor for Politics and Law at the University of Muenster.