Empirical evidence shows that effective contract enforcement encourages investment in economic activities and promotes sustainable economic growth. Effective enforcement procedures enhance predictability in commercial relationships by assuring investors that their contractual rights will be upheld promptly by local courts. The opposite is also true. When procedures for enforcing contracts are cumbersome or contract disputes cannot be resolved in a timely and cost-effective manner, companies may restrict their operations. This, in turn, can have a negative effect on investment and growth.[1]
