In construction projects, contractors often engage in opportunistic behavior. This research aims to examine the effect of asset specificity on contractors’ opportunistic behavior (strong form and weak form), including exploring and comparing the governance effectiveness of contract and trust. The empirical results from a survey of 228 Chinese owners reveal that asset specificity has positive effects on contractors’ strong and weak form opportunistic behavior, and the effect on weak form opportunistic behavior is stronger. The results further show that the impact of asset specificity on opportunistic behavior (strong form and weak form) reduces as contractual complexity increases. The effect of asset specificity on weak form opportunistic behavior decreases as trust strengthens. Accordingly, the findings manifest that effectiveness of contract was more prominent when moderating the relationship between asset specificity and strong form opportunistic behavior. These findings provide a nuanced and advanced understanding of whether complex contracts or high levels of trust are the more effective choices for governing opportunistic behavior and offer managerial suggestions for the parties involved in construction projects.

Contract violations have become common problems in construction projects, yet little of the construction contract literature addresses the question of responses to contract violations (i.e., contract enforcement). This research investigates the effects of trust on contract enforcement in a principal–agent relationship and explores the mediating role of risk perception on those effects. The authors distributed 429 electronic questionnaires and received 280 responses. After deleting responses completed in under 100 s and nonmanager responses, we narrowed the total to 253 valid responses from professionals in the Chinese construction industry. Hierarchical regression analyses were conducted to test the hypotheses in this study, and the findings revealed that goodwill-based trust diminishes the severity of contract enforcement, while perceived relational risk and perceived performance risk increase the severity of contract enforcement. Mediation analyses also support the mediating role of perceived relational risk on the effect of goodwill-based trust on contract enforcement. The findings contribute to contract theory by providing a thorough understanding of contract enforcement and developing a conceptual framework consisting of trust, perceived risk, and contract enforcement. Managers from violating parties may benefit from this article through an understanding of the role of trust and perceived risk in dealing with a contract violation and following the strategies recommended for diminishing the severity of contract enforcement.

This article explores the effect of prior ties on trust in contract enforcement after contractual breaches, which is underdeveloped in the existing literature, from a multifunctional perspective. In this research, both goodwill-based and competence-based trust have been distinguished to explore their mediating effects on the influence of prior ties on contract enforcement; two diverse functions of contracts, controlling and coordination, have been differentiated. This study also examined the moderating effects of the shadow of the future on these functions. Using data gathered from a paper-based survey of 195 Chinese general parties in the construction industry, we posit that prior ties between contracting parties will improve the level of both goodwill-based and competence-based trust between them, thus negatively influencing the severity of contract enforcement. Furthermore, the inhibiting effects of competence-based trust on the severity of coordination contract enforcement will be strengthened under the circumstances of a higher likelihood of continued cooperation. This study offers a deep and nuanced understanding of contract enforcement.