Last modified: 2012-09-14
Abstract
2– Keywords: citrus, contract, incomplete, opportunism.
3– Justification/Motivation
The contract is a usual governance form in the transactions between citrus industry and orange growers since the 80’s, and are also common disputes in the contractual design that can protect parties, ensuring the agreements terms and preserving business gains over time. This paper is motivated to understand how incomplete contract can increase or not actors’ opportunism behavior, special between citrus industry and orange growers.
4– Research Problem
The research problem is how citrus contracts are negotiated and adapted over time? The key issue is whether relational contracts are design, how safeguards clauses can guarantee their property rights?
5– Methods
The method is a contracts multi-case study, as ten (10) orange growers’ samples are taken and a documental analysis of twenty (20) contracts with some citrus industries will be done.
6– Discussion
Purchase and sale agreement is the main type of governance in citrus industry and orange growers transactions, because is a way of parties to guarantee the business gain and also the orange specificities, trying to decrease uncertainty and set frequency. All of these governing elements are written in the contract’s safeguards clauses. The contractual relation between citrus industry and orange growers are a historical construction by a private ordering, which initiates in the 80’s with the standard contract and is modified in 1995 with the specifics contracts. The institutional environment change in 90’s, associated with the backward vertical integration of citrus industry; increase his bargain power in the following contracts. These work research reach to do an analysis of these contracts designs over time between citrus industry and orange growers, in different periods, to understand why the conflict has increased.
7– Expected Results
The expected result of this research is to understand how the citrus industry power has influenced the resulting governances with the orange growers; it means that the incomplete contractual design had begun complex and self-interested, increasing opportunism action behavior and also the transaction cost.