An hourglass company, Timekeepers has a contract with Anguilla in order to import their fine white sand for use in the hourglasses. The contract is up for negotiation and the hurricane season is expected to be quite calm for the foreseeable future.Disappointingly, legal costs for contract negotiation have increased considerably.Also, dealing with red tape of getting the sand out of Anguilla has become cumbersome, but the government is very friendly to United States firms and has encouraged local economic development.

First of all, illustrate and explain contract duration due to higher legal costs using the market for contracts in Chapter 6. Secondly, might the time be right to forgo a new contract and instead vertically integrate with the sand supplier in Anguilla?Why or why not?