Contracts are frequently violated due to opportunism, misunderstandings, or external factors in construction projects. However, most previous studies focused on how to prevent contract violations but little research has been conducted on responses to contract violations (i.e., enforcement practices) and the factors affecting these responses. Drawing on Attribution Theory, this study constructs a moderated mediating model of enforcement decisions, including contractual enforcement and relational enforcement, from contract violation, to trust and then to enforcement decisions, with the moderating role of legal enforceability. The findings from questionnaires show that compared with spirit violations, letter violations lead to lower trust and, thus, increase the severity of contractual enforcement and relational enforcement. Furthermore, trust exerts a more negative effect on contractual enforcement when legal enforceability is strong. Theoretically, this study provides a deeper understanding of enforcement decisions by incorporating contractual enforcement and relational enforcement, by differentiating types of contract violations, and by considering legal institutions. Practically, overly severe enforcement may lead to disputes and litigation and even endanger the profitable long-term relationship. This study provides guidelines for managers from the violating party to avert overly severe enforcement, and thus avoid high dispute resolution costs and facilitate long-term partnering.
PurposeThe purpose of this paper is to establish an integrated framework of the antecedents of enforcement after contract violations in construction projects and to examine whether contract provisions (control and coordination provisions) and trust (goodwill and competence trust) affect enforcement mechanisms (contractual enforcement and relational enforcement).Design/methodology/approachA survey method was employed to test the hypotheses. The authors collected data from the Chinese construction industry, and general contractor respondents were asked to answer a questionnaire about a contract violation by one of their subcontractors.FindingsControl provisions and competence trust are positively related to contractual enforcement, but goodwill trust is negatively related to contractual enforcement. Relational enforcement is influenced by goodwill trust and competence trust.Research limitations/implicationsThis study treats contract violations as a given variable, and it focuses on contract violations by subcontractors. The cross-sectional design makes it difficult to confirm the causality of the relationships.Practical implicationsOverly strict contractual enforcement can generate disputes and a vicious cycle of retaliation, and overly severe relational enforcement can damage a potentially profitable long-term relationship. In construction projects, the violating party will benefit from this study to avoid excessively contractual enforcement and relational enforcement, thus developing a more collaborative atmosphere on the current project and even establishing a solid long-term relationship.Originality/valueThis study extends the project management literature by investigating the antecedents of enforcement after contract violations, an area not yet fully researched.
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