Contracts as a Learning Cycle

David Orozco, Bank of America Professor of Business Administration, Florida State University, USA

Not all contracts are the same. In fact, a strategic goal among business people is to develop what are called relational contracts. Relational contracts reside at the opposite end of a spectrum in relation to transactional contracts. Transactional contracts are short-term, template-driven, focus on legalese, and do not intend to create a lasting relationship in business that is centered on mutually reinforcing values. The rates of substitution and turn-over are high in transactional contracts. Think of a car rental agreement.

Professor Orozco lectures to and collaborates with innovators in the legal, technology, and publishing sectors. His award-winning college textbook Business Law and Strategy (2nd Edition) has been adopted by more than 100 universities in the U.S. and internationally.

Florida State University is a major research university with an annual operating budget of more than $2.5 billion USD.