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Australian Journal of Asian Law

Abstract from Volume 9 No 1 (2007)

The Norms and Incentive Structures of Relational Contracting in Vietnam – Two Surveys

Quan H Nguyen, LLB (Vietnam), MCL (UQ), PhD (Melb) is Lecturer in Business Law at Swinburne Univer­sity of Technology and Managing Consultant, Quan Consulting (

Economists have often stated that, without adequate systems of contract law, an economy will be unable to flourish. This assumption has been challenged by legal realists, who contend that contract law may not be the only way to ensure promises are kept. This article examines this assumption through the perspective of business and contract practices in Vietnam. This is done through in-depth interviews and case studies of the interactions of business, human relationships and the law in the market. The article first sets out the different types of participants involved in this study and their professional, ethnic and social backgrounds. Second, the protocol used in interviews is explained. Third, the data from the interviews is analysed and an explanation for certain behaviours of participants in contracting and business practices is offered. Fourth, the article examines how participants view certain contractual concepts, including the contract itself, negotiation, performance and enforcement. Finally, the article looks at McMillan and Woodruff’s previous scholarship on mapping contractual behaviour in Vietnam. It critiques the iterative game theory hypothesis of relational contracts, arguing that it is institutional social norms, rather than the nature of persons, which determine contractual behaviour.

(2007) 9(1) Asian Law 44-65

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