THE PURE THEORY OF CONTRACTS AND THE DOCTRINE OF CONTRACTUAL INCOMPLETENESS: COMPARING IMPACTS OF LONG-TERM ENERGY CONTRACTS ON SUSTAINABLE ENERGY DEPLOYMENT

Incomplete Contracts to long-term Power Purchase Agreements (PPAs) in fostering sustainable renewable energy deployment. The central research question explores how contractual design, specifically addressing incompleteness and power imbalances, influences the effectiveness of PPAs in achieving renewable energy targets. Objectives include analysing the theoretical frameworks, evaluating existing PPA structures, and proposing improvements for enhanced sustainability outcomes. Employing a mixed-methods approach, this research combines doctrinal legal analysis of contractual principles with qualitative case studies of renewable energy PPAs in diverse contexts. Legal analysis highlights the limitations of assuming complete contracts and emphasises the importance of incorporating flexibility into long-term agreements. Case studies provide empirical insights into how incomplete contracts and power asymmetries impact project implementation, risk allocation, and long-term viability. Key findings reveal that traditional PPA structures often fail to adequately address unforeseen contingencies and power imbalances, hindering sustainable renewable energy deployment. Incomplete contracts necessitate robust renegotiation mechanisms and adaptive governance structures. Furthermore, the study highlights the importance of incorporating social and environmental externalities into contractual frameworks. Recommendations include adopting a dynamic PPA structure that promotes collaborative risk sharing, incorporating clear dispute resolution processes, and implementing mechanisms for periodic contract review. This research concludes that integrating the insights of the Pure Theory of Contracts and the Principle of Incomplete Contracts into PPA design is crucial for fostering resilient and sustainable renewable energy ecosystems. Jointly addressing key principles of contractual incompleteness and power asymmetries can provide leverage for PPAs to be more effective in driving energy transition to a low-carbon future.