Unfinished contract meaning

In economic theory, the field of contract theory can be subdivided in the theory of complete contracts and the theory of incomplete contracts. In contract law, an incomplete contract is one that is defective or uncertain in a material respect.

A complete contract in economic theory means a contract which provides for the rights, obligations and remedies of the parties in every possible state of the world.^[1] However, since the human mind is a scarce resource and the mind cannot collect, process, and understand an infinite amount of information, economic actors are limited in their rationality (the limitations of the human mind in understanding and solving complex problems) and one cannot anticipate all possible contingencies.^[2][3] Or perhaps because it is too expensive to write a complete contract, the parties will opt for a "sufficiently complete" contract.^[4] In short, every contract is incomplete for a variety of