Courts of Law and Unforeseen Contingencies

Luca Anderlini, Leonardo Felli () and Andrew Postlewaite ()

No 2835, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We study a contracting model with unforeseen contingencies in which the court is an active player. Ex-ante, the contracting parties cannot include the risky unforeseen contingencies in the contract they draw up. Ex-post the court observes whether an unforeseen contingency occurred, and decides whether to void or uphold the contract. If the contract is voided by the court, the parties can renegotiate a new agreement ex-post.

Keywords: Incentives; Optimal Courts; Risk; Unforeseen Contingencies (search for similar items in EconPapers)
JEL-codes: D74 K40 L14 (search for similar items in EconPapers)
Date: Written
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Related works:
Working Paper: Courts of Law and Unforeseen Contingencies
Working Paper: Courts of Law and Unforeseen Contingencies (2006)
Working Paper: Courts of Law and Unforeseen Contingencies (2003)
Journal Article: Courts of Law and Unforeseen Contingencies (2007)
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