Which contracting party gains from the use of a more sophisticated contract?
A)The principal,who offers the contract.
B)The agent,who accepts the contract.
C)Both parties may lose.
D)Both parties gain equally.

Question

Quizplus · Accepted Answer

The principal, who offers the contract, typically gains from the use of a more sophisticated contract because it allows for better alignment of the agent's actions with the principal's interests, potentially reducing agency costs.

Which Contracting Party Gains from the Use of a More