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HandWiki. Proactive Contracting. Encyclopedia. Available online: https://encyclopedia.pub/entry/33480 (accessed on 24 September 2026).
HandWiki. Proactive Contracting. Encyclopedia. Available at: https://encyclopedia.pub/entry/33480. Accessed September 24, 2026.
HandWiki. "Proactive Contracting" Encyclopedia, https://encyclopedia.pub/entry/33480 (accessed September 24, 2026).
HandWiki. (2022, November 08). Proactive Contracting. In Encyclopedia. https://encyclopedia.pub/entry/33480
HandWiki. "Proactive Contracting." Encyclopedia. Web. 08 November, 2022.
Proactive Contracting
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Proactive Contracting is akin to Proactive Law and focuses on the same properties, namely to prevent problems and promote relationships. The legal area of research developed in Scandinavia in the 1990s and has gradually gained attention. Proactive Contracting deals with Contract Management, Relational Management, Risk Management and Business Process Management. The word proactive is the opposition to reactive and refers to acting in anticipation of future problems, needs, or changes. A survey conducted by IACCM shows that businesses urge a paradigm shift in contracting, favoring a more relational approach. Thus, the focus of future contracting becomes more relational. Businesses may therefore face increased complexity as trading is done not only across physical boundaries, but also across religious, cultural, and ethical boundaries. The IACCM survey has underpinned the need for re-thinking contracts and the approach to business relationships, as international, and long relationships, make it hard to draft and agree upon every single event that might occur in the future. Proactive Contracting is moving away from the path of responding to these complex relationships with complex contracts. However, as it is hard to imagine realistic alternatives to contracts, Proactive Contracting suggest businesses to change perception of contracts to meet the needs of the future. Add to this the increased complexity of products due to technological evolution and it becomes clear that businesses need to actively deal with the danger of increasing complexity and uncertainty. In fact, a survey conducted by IBM Corporation revealed that 79% of Chief Executive Officers (CEOs) see increased global complexity as a major challenge over the coming years. As the legal framework increases in complexity, it becomes apparent that there is a need for creating certainty in order to support future trading. Businesses need to manage this complexity in order to avoid unnecessary losses, but also in order to exploit all the possibilities deriving from global interaction. Empirical studies on contracting capabilities and research on dynamic capabilities have shown that promoting proactive behavior in businesses is a key in the quest of future success. As globalization increases, sustainability and certainty become more urgent, resulting in decentralization of the traditional legal environment. The reason for this decentralization is that the traditional legal environment does not fulfill the task of creating the certainty and sustainability that businesses need in order to prosper. After the launch of the United Nations Decade of Education for Sustainable Development, mechanisms have evolved through which future development is achieved. According to these mechanisms, a sound development must be focusing on ethically acceptable, morally fair and economically sound processes. Management tools for global value chains have already been developed, and focus is especially on self- and private regulation instruments and standards - this is where proactive contracting and proactive law is coming to the fore.

global value chains private regulation global complexity

References

  1. Brown, Louis M. (1950). Preventive Law. Prentice-Hall. p. 1. 
  2. Dauer E. A., Four Principles for a Theory of Preventive Law, p. 13-35
  3. Contracting Excellence http://www.iaccm.com/news/contractingexcellence/?storyid=338
  4. http://www.scandinavianlaw.se/pdf/49-2.pdf
  5. Siedel, G. J., Haapio, H.: Proactive Law for Managers (2011), p. 110.
  6. Sorsa K. (ed.): Proactive Management and Proactive Business Law – A Handbook. (2011) 1. ed., Turku: Tampereen Yliopistopaino Oy – Juvenes Print. p. 86.
  7. http://pure.au.dk/portal-asb-student/files/55302637/Overcoming_the_Challenges_of_Future_Contracting_through_the_Use_of_Proactive_Law.pdf p. 39
  8. Sorsa K. (ed.): Proactive Management and Proactive Business Law – A Handbook. (2011) 1. ed., Turku: Tampereen Yliopistopaino Oy – Juvenes Print. p. 87.
  9. http://www.pwc.com/gx/en/arbitration-dispute-resolution/assets/pwc-international-arbitration-study.pdf
  10. IACCM: The future of contracting, (2012).
  11. Siedel, G. J., Haapio, H.: Using Proactive Law for Competitive Advantages. (2010), American Business Law Journal, vol. 47, no. 4, pp. 641- 686.
  12. Coase, R. H.: The Problem of Social Cost (1960), Journal of Law and Economics, vol. 3, pp. 1-44.
  13. Flechtner, H. M. et al.: Drafting Contracts under the CISG. (2008), New York, Oxford University Press, 1. ed.
  14. Klein, Peter G., New Institutional Economics. July 1998. Available at SSRN: doi:10.2139/ssrn.115811. https://doi.org/10.2139%2Fssrn.115811
  15. Bridge, G., Michael: Uniformity and Diversity in the Law of International Sale, (2003) Pace International Law Review, spring 2003.
  16. Germany 8 March 1995 Supreme Court (New Zealand mussels case) [translation available] http://cisgw3.law.pace.edu/cases/950308g3.html
  17. Henschel, René Franz: The Use of Law and Economics Arguments in Cases Governed by CISG. (2011), in: Schwenzer, I. & Spagnolo, L.: State of play – The 3rd Annual Maa Sclechtriem CISG-conference, International Commerce and Arbitration, vol. 11, pp. 29-49.
  18. http://www.iaccm.com/userfiles/file/CE_April2.pdf
  19. Contracting Excellence http://www.iaccm.com/news/contractingexcellence/?storyid=1196
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