Template-Type: ReDIF-Article 1.0

Author-Name: Laszlo Csorba
Author-Workplace-Name: Eszterházy Károly Catholic University
Author-Email: csorba.laszlo@uni-eszterhazy.hu


Title: The Effect of a Stronger Bargain Position on the Perfection and Completeness of a Contract

Abstract: With a stronger bargain position, it is possible to achieve more favourable conditions
for the potential conclusion of a contract. Although a dominant position is commonly
associated with a stronger bargain position, their relationship is neither required
nor common. A relatively stronger bargain position usually results from the parties'
reliance and dependence on each other. Reliance is generally based on the lack
of alternatives and reserves. The effect of basic factors affecting reliance may be
influenced by the relevant knowledge and negotiation techniques of a party. Even
the conclusion of a so-called perfect contract may be hindered by an intent to
abuse a stronger bargain position, and after conclusion, it may lead to performance
problems. The conclusion of a so-called complete contract may be hindered as well,
since higher risk exposures increase the number of future alternatives. A certain
degree of exploitation of a strong or relatively stronger bargain position gained
through business successes is an important driving force in market economies, but
it is challenging to adjust this to the demands for perfect or complete contracts.

Classification-JEL: C50, D82, D86, G21
Keywords: bargain position, dominant position, perfect contract, complete contract, moral hazard
Pages: 101-121
Volume: 21
Issue: 3
Year: 2022
File-URL: https://en-hitelintezetiszemle.mnb.hu/letoltes/fer-21-3-st4-csorba.pdf
File-Format: Application/pdf
Handle: RePEc:mnb:finrev:v:21:y:2022:i:3:p:101-121