In post-investment holdup as sunk cost problem associated with contract-specific fixed investments. The modern theory of contracts is sometimes called the theory of joining wills which simply means when parties make an agreement they are joining together to endeavor of mutual interest. The problem with all contracts that endure over time is that not all potential challenges can be anticipated. The idea of joining wills is that parties will attempt to seek accommodations to advance their mutual interest, so long as the return on the invested activity pays off. Froeb illustrates the idea by the example of marriage as a contract.

In your answer explain: what is the sunk, or stranded cost; what is the contract; was the contract breached; and what are the damages.

- Your firm conducted a search for a new Chief of Finance and hired a highly qualified candidate with a yearly salary of $250,000.After six months the person left to join another firm.