achieved by writing a contract that specifies a suffciently high quality level. In contrast, the result by Che and Chung (1999 … hybrid case. We also show that if the quality specified in the contract is too low, 'expectation damages' do not necessarily …

that hardly explains the many features of an insurance contract. We extend this setup to include the situation that the … costlessly observable, then it should be included in the contract to improve the risk sharing-incentive trade-off under moral … resulting incompleteness of the contract opens the door to controversies and disputes that may lead to judicial procedures. We …