Anderlini, Luca; Felli, Leonardo; Postlewaite, Andrew - London School of Economics (LSE) - 2003
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. There are two effects of a court that voids more contracts …