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- Contractual constraints are legal obligations that restrict an individual or organization from performing certain actions1. They are a legally binding agreement between two or more parties that outlines the terms and conditions under which they will operate1. In the context of dividend decisions, contractual constraints refer to the financial position of the firm, the liquidity elements, legal factors, and their access and borrowing capacity in the financial markets2.Learn more:✕This summary was generated using AI based on multiple online sources. To view the original source information, use the "Learn more" links.Contractual constraint refers to a legal obligation that restricts an individual or organization from performing certain actions. It is a legally binding agreement between two or more parties that outlines the terms and conditions under which they will operate.edurev.in/question/2061857/What-is-contractual-co…The contractual constraints in dividend decisions are the financial position of the firm, the liquidity element s, legal factors and their access and borrowing capacity in the financial markets. The constraints show the limitation of the firm till certain earnings have been done.brainly.in/question/8701524
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