Contract Enforcement for Claimants’ Satisfaction with Construction Dispute Resolution: Moderating Role of Shadow of the Future, Fairness Perception, and Trust

Abstract

This study pivots around the relationship between claimants’ contract enforcement (i.e., the degree of pursuing contractual rights when resolving construction disputes) and their satisfaction with the resolution outcome. Little is known about how this relationship is contingent upon informal elements that may replenish contracts—such as the shadow of the future, fairness perception, and trust. To answer these questions, the authors collected data from contractors as claimants. The results show that claimants’ satisfaction is positively associated with rigid contract enforcement, with fairness perception, and with trust strengthening this relationship (but trust merely functions in cross-border interorganizational relationships). Flexible contract enforcement regarding obliging behaviors undermines claimants’ satisfaction, and this relationship is negatively moderated by the shadow of the future. Hence, fairness perception and trust play a complementary role in the effectiveness of rigid contract enforcement, while the shadow of the future exacerbates the detrimental impact of flexible contract enforcement. This study not only advances our understanding of contractual governance from the reactive perspective and construction dispute management but also enhances practitioners’ capability of coping with disputes regarding how to enforce formal contracts and proactively alter informal elements.