Macaulay’s study, as David Trubek notes, "juxtaposes the assumptions built into the law of contracts with an empirical investigation of what businessmen do. While the law of contracts presupposed that commercial relations are established explicitly in advance, Macaulay found that businessmen rarely plan in advance for the long term implications of their transactions. Where the law of contracts presupposed that breakdowns in business relations will be resolved in courts through the application of the rules of contract law, Macaulay found that courts were rarely used by businessmen with disputes." [David M. Trubek, "Where the Action Is: Critical Legal Studies and Empiricism," 36 Stan. L. Rev. 575, 587 (1984)]

Macaulay’s "research technique involved interviewing 68 businessmen and lawyers representing 43 companies and six law firms ... All but two of the companies had plants in Wisconsin; 17 were manufacturers of machinery but none made such items as food products, scientific instruments, textiles or petroleum products. Thus the likelihood of error because of sampling bias may be considerable....

... [Macaulay’s research found that] most larger companies, and many smaller ones, attempt to plan carefully and completely. Important transactions not in the ordinary course of business are handled by a detailed contract....

More routine transactions commonly are handled by what can be called standardized planning. A firm will have a set of terms and conditions for purchase, sales, or both printed on the business documents used in these exchanges. Thus, the things to be sold and the price may be planned particularly for each transaction, but standard provisions will further elaborate the performances and cover the other subjects of planning. Typically, these terms and conditions are lengthy and printed in small type on the back of the forms....

In larger firms such "boiler plate" provisions are drafted by the house counsel or the firm’s outside lawyer. In smaller firms such provisions may be drafted by the industry trade association, may be copied from a competitor, or may be found on forms purchased from a printer. In any event, salesmen and purchasing agents, the operating personnel, typically are unaware of what is said in the fine print on the back of the forms they use. Yet often the normal business patterns will give effect to this standardized planning...

While businessmen can and often do carefully and completely plan, it is clear that not all exchanges are neatly rationalized. Although most businessmen think that a clear description of both the seller’s and buyer’s performances is obvious common sense, they do not always live up to this ideal....

Businessmen often prefer to rely on ‘a man’s word’ in a brief letter, a handshake, or ‘common honesty and decency’ - even when the transaction involves exposure to serious risks....

It is likely that businessmen pay more attention to describing the performances in an exchange than to planning for contingencies or defective performances or to obtaining legal enforceability of their contracts. Even when a purchase order and acknowledgment have conflicting provisions printed on the back, almost always the buyer and seller will be in agreement on what is to be sold and how much is to be paid for it....

Thus one can conclude that (1) many business exchanges reflect high degree of planning about the four categories - description, contingencies, defective performances and legal sanction - but (2) many, if not most, exchanges reflect no planing, or only a minimal amount of it, especially concerning legal sanctions and the effect of defective performances. As a result, the opportunity for good faith disputes during the life of the exchange relationship often is present....

... While a significant amount of creating business exchanges is done on a fairly noncontractual basis, the creation of exchanges usually is far more contractual than the adjustment of such relationships and the settlement of disputes. Exchanges are adjusted whet the obligations of one or both parties are modified by agreement during the life of the relationship.... Dispute settlement involves determining whether or not a party has performed as agreed and, if he has not, doing something about it....

Business exchanges in non-speculative areas are usually adjusted without dispute...

Disputes are frequently settled without reference to the contract or potential or actual legal sanctions. There is a hesitancy to speak of legal rights or to threaten to sue in these negotiations.... as one businessman put it, ‘You can settle any dispute if you keep the lawyers and accountants out of it. they just do not understand the give-and-take needed in business.’...

Law suits for breach of contract appear to be rare...

At times, relatively contractual methods are used to make adjustments in ongoing transactions and to settle disputes. Demands of one side which are deemed unreasonable by the other occasionally are blocked by reference to the terms of the agreement between the parties. The legal position of the parties can influence negotiations even though legal rights or litigation are never mentioned in their discussions; it makes a different if one is demanding what both concede to be a right or begging for a favor. Now and then a firm may threaten to turn matters over to its attorneys, threaten to sue, commence a suit or even litigate and carry an appeal to the highest court which will hear the matter. Thus, legal sanctions, while not an everyday affair, are not unknown in business.

One can conclude that while detailed planning and legal sanctions play a significant role in some exchanges between businesses, in many business exchanges their role is small...

[Macaulay concluded that] contract and contract law [are] not needed in many situations, [furthermore] their use may have, or may be thought to have undesirable consequences. Detailed negotiated contracts can get in the way of creating good exchange relationships between business units. If one side insists on a detailed plan, there will be delay while letters are exchanged as the parties try to agree on what should happen if a remote and unlikely contingency occurs. In some cases they may not be able to agree at all on such matters and as a result a sale may be lost to the seller and the buyer may have to search elsewhere for an acceptable supplier. Most businessmen would react by thinking that had no one raised the series of remote and unlikely contingencies all this wasted effort could have been avoided.

Even where agreement can be reached at the negotiation stage, carefully planned arrangements may create undesirable exchange relationship between business units. Some businessmen object that in such a carefully worked out relationship one gets performance only to the letter of the contract. Such planning indicates a lack of trust and blunts the demands of friendship, turning a cooperative venture into an antagonistic horse trade. Yet the greater danger perceived by some businessmen is that one would have to perform his side of the bargain to its letter and thus lose what is called ‘flexibility.’ Businessmen may welcome a measure of vagueness in the obligations they assume so that they may negotiate matters in light of the actual circumstances....

Although contract is not needed and actually may have negative consequences, businessmen do make some carefully planned contracts, negotiate settlements influenced by their legal rights and commence and defend some breach of contract law suits or arbitration proceedings.... Exchanges are carefully planned when it is thought that planning and a potential legal sanction will have more advantages than disadvantages. Such a judgment may be reached when contract planning serves the internal needs of an organization involved in business exchange.... [or] where there is a likelihood that significant problems will arise...

An "irrational" factor may exert some influence on the decision to use legal sanctions. The man who controls a firm may feel that he or his organization has been made to appear foolish or has been the victim of fraud or bad faith. The law suit may be seen as a vehicle ‘to get even’ although the potential gains, as viewed by an objective observer, are outweighed by the potential costs...." [Steward Macaulay, "Non-Contractual Relations in Business: A Preliminary Study," 28 Am. Soc. Rev. 55 (1963)].