A Mutual Obligation to Cooperate within the Standard Contracts K03- and Schlüter: With a Specific Focus on Burdensome Subsequent Circumstances

Abstract

Studies have shown that collaborations between private and public sectors often fall short. This has been ascribed to a lack of goal congruence and efficient cooperation. Therefore, this thesis investigates if a mutual obligation to cooperate within the standard contracts K03- and Schlüter can improve the parties’ ability to navigate burdensome subsequent circumstances to make the contracts proactive tools. First, this thesis examined the standard contracts K03- and Schlüter to determine contractual similarities and differences. It was found that the contracts are similar from a contractual view. Both contracts tend to seek reactive- instead of proactive solutions when it comes to determining the parties’ obligations to cooperate and navigate burdensome subsequent circumstances. Next, the thesis determined how Danish private law resolves disputes related to burdensome subsequent events. Although the law has a wide range of measures to resolve such events, the application of these does not seem to be efficient in the circumstances related to the contracts in question. Also, the analysis dealt with the parties’ obligations to cooperate based on the contracts and a legal principle about loyalty from private law. It was concluded that the contracts lack an explicit and proactive obligation to cooperate. Hereafter, the incentives of the parties to cooperate and make relation-specific investments was investigated using economic theory. The purpose was to establish relational rent between the parties and determine the effect of an explicit obligation to cooperate. It was found that the contracts indeed will need an explicit obligation to cooperate to incentivize the parties to make relational-specific investments and minimize opportunistic behavior. Based on economic theory and within the legal framework, the thesis used principles from strategic contracting to make recommendations on how this obligation to cooperate could look like in both contracts. This was followed by recommendations on proactive provisions, specifically knowledge-sharing routines, and hardship. Conclusively, an ideal reference for both contracts on how to manage burdensome subsequent circumstances and secure relational rent was proposed.