Relational contracts (RCs) provide a solution to the constraints of transactional agreements. RCs are carefully designed for long-term arrangements involving mutual commitment, which require cooperation and communication between the parties. By adopting broad principles and focusing on overarching goals rather than specifying every possible outcome, RCs introduce flexibility into the contractual framework. 

We think that this flexibility is vital in the screen sector, where commercial assumptions are highly vulnerable to sudden shifts. When conditions change or initial assumptions prove false, a relational contract enables operational details to be adjusted within the framework of established principles and aims. This structural feature helps businesses reduce risks associated with future uncertainty and maintain project continuity.

The general stance under English law is that there is no mandatory duty requiring parties to act in good faith during contract performance. However, recent developments in commercial case law have identified circumstances where this duty can arise, fundamentally altering the landscape for long-term collaborative agreements. 

The adoption of structured, long-term relational models also offers strategic advantages beyond the immediate commercial relationship. By formalising relational intent and risk management protocols, screen businesses demonstrate stability and contractual maturity to institutional partners and financiers. Showing contractual fidelity and a transparent mechanism for handling financial and market uncertainty, perceived litigation risks are reduced. This sophisticated approach to governance enhances bids for public funding and institutional investment by assuring stakeholders that project continuity will be prioritised.

A business can use this contract style for any arrangement that requires a mutually flexible framework. The details of a transaction can be outlined in supplementary documents, including statements of work (or SOW) and mutually agreed policies.

To ensure judicial recognition and enforceability of the implied duty of good faith, relational intent must be made explicit throughout the document. All commercial terms must be expressed clearly, avoiding unnecessary jargon, to ensure all parties, including production and finance teams, fully comprehend their obligations.

The document should include a definition of the likely projects that  are being contemplated, as well as any specific arrangements that might be appropriate for the framework agreement.

Now you're ready to fill out your WorkWise for Screen legally compliant relational contract template, hit the download button below.