# kaal:claim:2267560-044

**Claim.** Parties in the incomplete contract model cannot adapt to unforeseen contingencies because they cannot specify ex-ante how those contingencies will be met, and transactions may be foregone or become too expensive if participants cannot rely on efficient and equitable adaptation.

**Type.** failure  **Support.** argued

**Source quote.**

> At the same time, parties in the incomplete contract model cannot adapt to unforeseen contingencies because they cannot specify ex-ante how those contingencies will be met (Kreps 1990, 93).

**From.** Wulf A. Kaal, *Evolution of Law Dynamic Regulation in a New Institutional Economics Framework* (2013), IV.2 Organizational Culture, page 12

**Cite as.** Wulf A. Kaal, Evolution of Law Dynamic Regulation in a New Institutional Economics Framework (2013). SSRN: https://ssrn.com/abstract=2267560

**Verify.** sha256 of source PDF `7ecc9dd1826121a95bf252476cdaa1c8737ad8079e12caf66c4342ffae7af8af` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202013%20-%20Evolution%20of%20Law%20Dynamic%20Regulation%20in%20a%20New%20Institutional%20Economics%20Framework.pdf

**Failure mode.** inability to adapt to unforeseen contingencies  (family: agency-cost-and-managerial-opportunism)

**Topics.** institutional-design

**Keywords.** incomplete-contracts, unforeseen-contingencies, adaptation, organizational-culture

**Related claims.**

- extended_by: https://wulfkaal.github.io/claims/2808132-033

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