Network approaches have expanded our view of markets as interconnected networks of exchange relationships, in which companies interact. This paper deals with an increasingly important aspect of interaction. This is the role of umbrella agreements in business relationships. These umbrella agreements can be understood as attempts to mirror the reality of business interaction by providing a framework of principles within which exchanges may happen. This paper builds on ideas on interaction to examine a number of real-world cases of umbrella agreements. It draws conclusions on the role of these agreements for managers and more widely on the nature of interaction itself.

Scholarly work on contracts offers a valuable lens through which exchange relationships among companies or individuals can be studied. Contracts may regulate business alliances, strategic partnerships or collaborations among parties. The nature and form of contracts have been investigated by a number of academic disciplines each of which has adopted a different approach. Much of this work has been of a theoretical nature and it is often referred as ‘relational contract theory’. This paper considers two theoretical approaches to ‘relational contracts’. The first theoretical approach to relational contracts is described as the ‘norms-based ’ approach, while the second is that of a group of organizational economists and is often referred as the ‘incomplete contracts ’ approach. In comparison only a limited number of empirical studies have been undertaken. This paper will set out the findings of these two major streams of theoretical analysis of contracts and then contrast them with recent empirical research into contracts described as ‘umbrella agreements’. The paper demonstrates that, while the two theoretical streams of relational contract theory are not contradictory, there are differences in their emphases and interpretations and that the results of empirical studies do not always conform to those that might be expected as a result of these theoretical studies.

Abstract. This empirical study addresses the problem of how Commercial-offthe-Shelf (COTS), tailored, and Modified-off-the-Shelf (MOTS) software contracting has been approached, in practice. The focus of the study is on analyzing different contractual characterizations of the three models of software business. The empirical part of the study was completed by analyzing twelve software producing companies -eight were Finnish firms established in the Silicon Valley area in the USA and the rest were local Finnish firms with international operations. The research produced a number of practical insights for managing and developing the contracting process.

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Although adequate management of relationships is often considered a key factor in Supply Chain Management, the use of formal contracts in this context has still been little studied or reported, even in the automotive industry. This article discuss the major findings of a study conducted in a representative supply chain of the auto industry to verify the use of contracts and how they affect the relationships of the companies in question. Based on an intentional sampling approach, a case study was made of an automaker that uses the industrial condominium configuration, two first tier suppliers operating inside the condominium, and a first tier supplier operating outside the condominium (a conventional supplier). Additionally, a basic framework was built to guide and define the key content of the research, which considered two premises and eleven parameters in the companies in question. The results pointed to some key findings, such as the fact that, whereas the formal contract in the conventional arm’s length relation has a “commercial ” bias, in the condominium relations it has a “management ” bias.