Let’s Work it Out (or We’ll See You in Court…) - Litigation and Private Dispute Resolution in Vertical Exchange Relationships

  title={Let’s Work it Out (or We’ll See You in Court…) - Litigation and Private Dispute Resolution in Vertical Exchange Relationships},
  author={Fabrice Lumineau and J. Oxley},
  journal={Negotiation \& Dispute Resolution eJournal},
We examine how partners in vertical exchange relationships actually resolve disputes that are sufficiently serious to get lawyers involved. Reaching beyond the usual domain of organizational and management research, we leverage findings from law and economics to offer a novel organizational perspective on litigation and private dispute resolution, and we develop hypotheses about the likelihood of litigation in different exchange settings. Our empirical analysis generates three sets of new… Expand

Topics from this paper

Contractual governance and the choice of dispute-resolution mechanisms: Evidence on technology licensing
In fast-paced and knowledge-intensive environments, licensing partnerships can be powerful levers for market expansion. Research on the management of technology-oriented licenses has nonethelessExpand
Now You See It, Now You Don't: Explicit Contract Benefits In Extralegal Exchanges
To enhance performance, buying firms often use supplier governance mechanisms, such as explicit contracts, to coordinate efforts. Yet, it is unclear how these governance mechanisms would perform inExpand
Relevant Characteristics of Third Party Decision Making in Joint Venture Disputes: The Case of Commercial Arbitration
Parties involved in an international joint venture face the risk that their investments are hold-up in a dispute with the other party. This might be an important reason why joint ventures and otherExpand
Who I Am and How I Contract: The Effect of Contractors' Roles on the Evolution of Contract Structure in University-Industry Research Agreements
It is submitted that as scientists gain contracting experience with an exchange partner their focus on knowledge creation supports the establishment of a relationship based on technical competence, behavioral experience, and operational routines that cause the enforcement terms of subsequent contracts to become less detailed. Expand
Perverse Complementarity: Political Connections and the Use of Courts among Private Firms in China
Using survey data of over 3,900 private firms in China, we examine whether—and how—political connections promote or undermine the use of formal legal institutions. We find that politically connectedExpand
Contracting Beyond the Market: Property Rights, Externalities, Historical Conflict, and Contractual Agreements between Firms and Nonmarket Stakeholders
Despite firms’ growing engagement of nonmarket stakeholders—such as local communities and nongovernmental organizations—there has been little research on the emergence of contractual agreementsExpand
The Many Futures of Contracts
In this article, we review the literature on interfirm contracting in an effort to synthesize existing research and direct future scholarship. While transaction cost economics (TCE) is the mostExpand
To insist or to concede? Contractors’ behavioural strategies when handling disputed claims
The purpose of this paper is to identify and analyse factors that affect contractors’ behavioural strategies in resolving disputed claims.,Factors were explored by a literature review and anExpand
The role of justice for cooperation and contract’s moderating effect in construction dispute negotiation
Purpose Justice, although well developed in the organisational field, has not been given adequate attention in the area of construction project dispute negotiations. Based on previousExpand
The Role of Relationship Scope in Sustaining Relational Contracts in Interfirm Networks
A theory of partnership scope in interfirm networks is developed that shows that under relational contracting, broader scope relationships encourage better mutual cooperation than narrow scope relationships, thereby maximizing the value created by them. Expand


Shadow of the contract: how contract structure shapes inter-firm dispute resolution
It is found that the level of contract detail affects the type of dispute resolution approach that is adopted when conflict arises, and that different approaches are associated with different costs for resolving the dispute. Expand
Private Justice in a Global Economy: From Litigation to Arbitration
Drawing on the analytical framework developed by Barbara Koremenos, Charles Lipson, and Duncan Snidal in the Rational Design project, I seek to shed light on the striking institutional differencesExpand
The Selection of Disputes for Litigation
THIS paper addresses the relationship between litigated disputes and disputes settled before or during litigation. The specification of this relationship is important for the analysis both of theExpand
Firms, Courts, and Reputation Mechanisms: Towards a Positive Theory of Private Ordering
This paper formulates a positive model that predicts when parties will employ private ordering to enforce their agreements. The typical enforcement mechanism associated with private ordering is theExpand
Learning to Contract: Evidence from the Personal Computer Industry
A detailed case study of a time series of 11 contracts concluded during 1989-1997 between the same two partners, both of whom participate in the personal computer industry, to explore whether and how firms learn to contract. Expand
Trust, Contract and Relationship Development
This article contributes to the debate on the relation between trust and control in the management of inter-organizational relations. More specifically, we focus on the question how trust and formalExpand
Uncertainty, Opportunism and Governance: The Effects of Volatility and Ambiguity on Formal and Relational Contracting
Volatility and ambiguity are generally thought to create exchange situations more conducive towards opportunism. We examine the effectiveness of contractual and relational governance in constrainingExpand
Do Formal Contracts and Relational Governance Function as Substitutes or Complements
While transaction cost economists have generally argued that hazardous exchange conditions warrant complex contracts or vertical integration, other scholars have argued that trust or relational formsExpand
Litigation and Settlement under Imperfect Information
A model of parties' litigation and settlement decisions under imperfect information is studied. The model shows how informational asymmetry influences parties' decisions, and how it might lead toExpand
A systematic assessment of the empirical support for transaction cost economics
Transaction cost economics (TCE) is one of the leading perspectives in management and organizational studies, yet debate continues regarding its empirical support. In this paper, we take stock of theExpand