Drawing on contract governance literature and institutional theory, this study investigates the differential effects of output‐ and behavior‐based contract governance on buyer–supplier conflict in supply chains. The authors develop a contingent perspective to examine how institutional factors moderate the impact of contract governance. The findings, from an empirical study of buyer–supplier dyads in China, show that an output‐based contract is negatively, whereas a behavior‐based contract is positively, related to buyer–supplier conflict. The effects of a contract are moderated by two primary institutional factors: legal enforceability and unilateral government support. These findings have important implications for supply chain research, public policy, and managerial practice.

While the literature tends to take a dichotomous view of supplier‐induced disruptions, we take a continuum perspective: a buyer perceives a disruption induced by the supplier to varying degrees (i.e., attributing varying levels of responsibility to the supplier), thus affecting the buyer's decisions in switching suppliers. By focusing on the recurrent disruptions, we argue that imputed buyers' attributions of responsibility are characterized by disruptions' recurrent nature and locus of causality —whether the disruptions were repeatedly triggered by recurrent events internal or external to the supplier. Furthermore, while previous studies have identified either buyers' attributions of disruptions or suppliers' justice approaches (to resolve disruptions) as independent factors driving buyers' decisions, we integrate attribution and justice theories and investigate their combined effect—how responsibility attributions affect buyers' switching intentions given suppliers' justice approaches. Using three vignette‐based studies of 705 purchasing managers (supplemented by three robustness check studies), we show that distributive justice attenuates the damaging impact of disruptions triggered by suppliers' internal incidents (internal locus) on buyers' switching intentions, whereas procedural and interactional justice are more instrumental in disruptions triggered by external events (external locus). We conclude by offering substantive guidance for suppliers regarding appropriate actions in preserving the relationship.