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Abstract
Contracts are frequently violated due to opportunism, misunderstandings, or external factors in construction projects. However, most previous studies focussed 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.
Acknowledgments
The authors also appreciate the financial support from the Tianjin University Graduate Student International Academic Exchange Fund Grant Program. We thank Reviewer #2 for inspiring us to incorporate this future research direction.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Data availability statement
The data that support the findings of this study are available from the corresponding author, Yangbing Zhang, upon reasonable request.
Additional information
Funding
Notes on contributors
Hongjiang Yao
Hongjiang Yao is a PhD student majoring in management science and engineering in the College of Management and Economics at Tianjin University. His research interests include interorganizational governance and project resilience. He has published articles in journals, such as Journal of Management in Engineering, Journal of Construction Engineering and Management, Engineering Construction & Architectural Management, and International Journal of Managing Projects in Business.
Yongqiang Chen
Yongqiang Chen is a professor of construction management in the College of Management and Economics at Tianjin University and used to be a Fulbright Scholar at Stanford University. His research interests include project management, contract management, and risk management of international construction projects. He has published books in the field of project management and articles in journals such as IEEE Transactions on Engineering Management, International Journal of Project Management, Journal of Management in Engineering, and Construction Management and Economics.
Yurui Zhang
Yurui Zhang obtained her Master Degree at Tianjin University in 2020. Since then, she has been working at the China Machinery Engineering Corporation. Her research interests include interorganizational relationships and contract management.
Min Zhang
Min Zhang is a Professor in Management in the Queen’s Management School, Queen’s University Belfast. He gained his PhD degree from the Chinese University of Hong Kong. His research interests include operations management, innovation management, and business analytics. He has authored/coauthored articles in refereed journals including Production and Operations Management, International Journal of Operations and Production Management, International Journal of Production Economics, International Journal of Production Research, and Production Planning and Control.
Yangbing Zhang
Yangbing Zhang is a post-doctoral fellow of construction management in the School of Civil Engineering and Transportation at the South China University of Technology. She got her PhD degree from the University of Hong Kong. Her research interests include project management, contract management, trust and project governance. She has published articles in journals such as Journal of Management in Engineering and Journal of Construction Engineering and Management, Engineering Construction & Architectural Management, and International Journal of Conflict Management.