… Static efficiency considerations will generally require that contract modifications be enforced on the grounds that the immediate contracting parties perceive mutual gains from recontracting that cannot, at the time modification is proposed, be realized as fully by any alternative strategy. On the other hand, dynamic efficiency considerations focus on the longrun incentives for contracting parties at large imparted by a set of legal rules. In the modification context, these dynamic efficiency considerations adopt an ex ante perspective, rather than the ex post perspective implicit in the static efficiency considerations. Adopting the former perspective, rules that impose no constraints on recontracting may increase the overall costs of contracting by creating incentives for opportunistic behavior in cases where “holdup” possibilities arise during contract performance. As well, even where a genuine change has occurred in the economic environment of the contract between the time of formation and the time of modification such that, in the absence of modification, one party faces an increase in the costs of performance relative to expectations at the time of contract performance, allowing recontracting may facilitate the reallocation of initially efficiently assigned risks. This leads to moral hazard problems that may attenuate incentives for efficient risk minimization or risk insurance strategies by the party who subsequently seeks the modification. Thus, what is in the best interests of two particular contracting parties ex post contract formation when a modification is proposed and what is in the interests ex ante of contracting parties generally in terms of legally ordained incentives and constraints that minimize the overall costs of contracting may lead to divergent policy perspectives.