Contractual relationships in the food chain and contract enforceability

Fertő, Imre – Bakucs, Zoltán

Keywords: food chain, regulations, legal system, self-enforcing agreement, empirical studies

Contractual relationships play an increasingly important role in the modern food chain. The efficient working of the food chain requires the fulfilment of contracts between partners. Theoretical models emphasise different aspects of courts in contract enforcement. This article investigates the enforcement of contracts in the Hungarian food chain by means of a survey. Our main results are as follows. The majority of respondents believe that contract enforce-ment via the court is very time-consuming and costly. But a minority of firms goes to the court in order to enforce their contracts. Respondents evaluate positively the regulations, but they have some doubts about their efficiency. Producers and small exporter firms are more sensitive to the negative impact of the economic crisis than are large and domestic market ori-ented firms.

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