Opportunism fears, not drafting effort, drive the costly contingency planning in contracts.

Evidence

Trust enters into the argument because the presence of these costs is directly linked to the possibility that economic actors will be have opportunistically. This is obvious enough in the case of contract enforcement, but perhaps less so in those of negotiation and adaptation. Surely these latter costs are attributable to the time and expense of drafting a comprehensive agreement that attempts to account for all possible contingencies. But Williamson (1985) has made the point that in the absence of opportunistic behaviour there would be no need to attempt such costly planning: it would suffice for the two parties to agree always to adapt output to unanticipated contingencies in a jointly optimal way and always to share profits according to some general rule established in advance. Sequential adaptations would not pose risks if one could trust the other to behave honestly. — Diego Gambetta, Trust - Making and Breaking Cooperative…, 2520

Categorization

• DEFINE: Sharpens what ‘opportunism’ means: the distrust that forces exhaustive contracts when trust would avoid them.