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Since the beginning of the 1980s, an increase in the number of fixed-term employment contracts has been apparent in a number of free-market-oriented economies. This has been accompanied by amendments to the pertinent legislation. From the early to mid-1980s, a number of EC countries initiated legislation with the object of facilitating the conclusion of fixed-term contracts. How is this development to be assessed from an economic point of view?

This article takes stock of legal responses to temporary performance impediments in long-term contracts due to the Covid-19 crisis. Are there mechanisms in contract law that can adequately address the disruption caused by the pandemic and by government measures to contain it? And are contract law doctrines able to provide solutions with a long-term view? The article analyses tenants' protection in commercial and residential lease contracts in England and the Netherlands. The analysis confirms that English contract law provides only a narrow scope for relief based on frustration. Dutch contract law offers broader possibilities for rent discounts on the basis of unforeseen circumstances, good faith and the defects regime in tenancy law. Overall, both systems struggle with two problems: the valuation of rent discounts in times of crisis, and the financial protection of vulnerable parties when payment obligations are revived after the crisis. Long-term changes to contract law should include adjustments of the default rules for long-term contracts to address these issues, linked to a principle of social force majeure.

"Long-term contracts are explained as equilibrium strategies of supergames. In the specific coherent general equilibrium model provided, limited mobility of labor, in the form of a fixed cost of moving, generates long-term contracts"--Federal Reserve Bank of Minneapolis web site

This Article uses the techniques of modern decision analysis and game theory to analyze the decisionmaking strategies of parties to long-term commercial contracts. Most parties to long-term contracts initially allocate the risks of future contingencies and agree – either explicitly or implicitly – to adjust this initial risk-allocation scheme if unanticipated events occur. Once contract risks are initially distributed, however, each party's self-interest may compel them to evade their responsibility rather than adjust cooperatively as originally agreed. Visualizing the interactions between contracting parties as an iterated prisoner's dilemma, the Author attempts to clarify the dynamics of this adjustment process. Professor Scott employs a game theoretic model to demonstrate that two polar behavioral patterns – either conflict or cooperation – would dominate if parties were unable to bargain over adjustment. However, this choice may not occur, he suggests, because even parties that are precluded from negotiating each adjustment option, nevertheless can communicate their intentions to each other. Under these conditions, a cooperative equilibrium will emerge so long as one of the parties commits to a strategy of conditional cooperation before the first adjustment is necessary. Professor Scott notes that in more realistic contractual situations, some breakdowns in patterns of mutual cooperation are inevitable. In actual contract settings, substantial problems of information and enforcement may threaten the parties' efforts to realize a cooperative equilibrium. Nevertheless, he concludes that parties in continuing relationships can invoke various legal and extralegal mechanisms to reduce these information and enforcement deficits and strengthen the existing matrix of social and contractual norms.

AbstractWe explore the relationship between earnings, education, and fixed‐term contracts using data from the 1997 British Social Attitudes Survey. We find that the log hourly wage of workers employed under such contracts is approximately 13% lower than that of their 'permanent' counterparts, even after controlling for a plethora of personal and job characteristics. Standard decompositions indicate that the vast majority of this differential (more than 70%) is attributable to price effects, which may reflect discrimination on the part of the employer. Such findings may, therefore, suggest that employment protection is appropriate for individuals employed under fixed‐term contracts.

The use of award-term contracts doesn't seem to represent the best interests of the U.S. taxpayer—rather, it smacks terribly of the government acquisition environment of two decades ago that pre- ceded the passage of the Competition in Contracting Act.