Research On Contractor Moral Hazard Prevention And Contract Performance Incentive

The construction industry is an important part of our national economy,and has a stable position in the pillar industry of the national economy.In recent years,the number of disputes over construction contracts has remained high,and the moral hazard behavior of contractors that violate the spirit of the contract is common,which will damage the project interests of the owner and have a negative impact on the efficiency of contract performance.Based on research,most of the current research on the moral hazard of contractors is to analyze the moral hazard behavior through literature research or interviews,but less through the judicial practice.And it is found that most studies seldom discuss the incentive path of contractor from the perspective of formal contract and relational contract.This paper take this opportunity to analyzes the causes of moral hazard behavior through the analysis of literature,contract demonstration texts and judicial precedents,and combines the multi-task principal-agent theoretical model to establish the cost-benefit function of the owner and the contractor.And it explores the influencing factors of contract performance incentives under the two models,and based on the owner’s perspective,a performance incentive path to prevent contractors’ moral hazard is proposed.Research shows that the incentive of the formal contract depends on the setting of the risk allocation clauses,and the appropriate adjustment of the contract incentive clauses of the construction project,cost,and quality will help improve the contractor’s effort.Therefore,the measurability constrains the moral hazard behavior of the contractor,and can be observed by a third party such as the court,which protects the legitimate rights and interests of the owner and helps to achieve the purpose of the contract.However,the incompleteness of the actual formal contract determines that there is still a lack of incentives.The intervention of the relationship contract can effectively make up for this deficiency and promote the improvement of the efficiency of both parties’ performance.On the one hand,the relationship contract adjusts the cooperative relationship between the owner and the contractor through self-execution,on the other hand,it focuses on adjusting the long-term cooperative relationship and establishes a network of trust and cooperation between the two parties.Therefore,the formal contract and the relationship contract are combined,and the current incentive and long-term incentives are compatible with the construction project contract performance incentive combination model,which is to improve the self-performance binding force of the contract parties,prevent the contractor’s moral hazard,promote the parties to continue cooperative transactions,and reduce transaction costs,also is an efficient choice for building an orderly construction market order.