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Formal Relational Contract: Establishing a Partnership Mentality

Recording of a 90-minute CLE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Wednesday, May 18, 2022

Recorded event now available

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This CLE webinar will address how to utilize a formal relational contract for a business arrangement. The panel will discuss the process of establishing a formal relational contract, how the parties can work jointly to achieve individual goals, and when a traditional contract would be considered best practices.


Long term formal business arrangements often leave little room for the dynamic nature of a changing economy. A co-authored October 2020 Harvard Business Review article promotes the use of "formal relational contracts" as a means of obviating or limiting opportunistic behaviors by contracting parties allowing parties to consider and amend terms due to either unknowable circumstances or factors beyond the businesses control.

Similar to Agile, a formal relational contract allows parties to amend terms and reset objectives. However, a formal relational contract is one that specifies mutual goals and establishes governance structures to keep the parties' expectations and interests aligned over the long term. Designed from the outset to foster trust and collaboration, this legally enforceable contract is especially useful for highly complex relationships in which it is impossible to predict every what-if scenario.

Five steps to the framework of formal relational contracts are generally accepted. The parties typically must have mutual values and objectives prior to beginning any actual contracting with terms and conditions of the formal relational contract tightly aligned with those principles. The process also provides for continued monitoring and governance to adjust terms as needs require.

Listen as our expert panel discusses formal relational contracts and relational contracting, as well as how to assess the utility and desirability of using relational contracting in times of uncertainty.



  1. Formal relational contracts
    1. Defining formal relational contracts
  2. Mitigating risks
  3. Dell v. FedEx
  4. Process
  5. Best practices


The panel will address these and other key topics:

  • What is formal relational contracting?
  • What are the lessons learned from the Dell v. FedEx case?
  • What is the process for establishing a formal relational contract?


Bergman, Jim
Jim Bergman

Commercial Officers Group

Mr. Bergman is a commercial contract professional with global experience spanning the USA, Latin America, UK, Europe,...  |  Read More

Vitasek, Kate
Kate Vitasek

Architect of the Vested Business Model
University of Tennessee

Ms. Vitasek is an international authority for her award-winning research and Vested® business model for highly...  |  Read More

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