One of the reasons for long term contracts is that a market which is competitive ex ante may become a bilateral monopoly ex post, after both parties have made relationship specific investments. One form of long term employment contract might specify that the contract normally expires in X years, but the employer has the option of renewing it for an additional Y years under certain circumstances.
Whether that is consistent with what is happening here depends, as Fred says, on whether enlistees knew about the possibility for a stop-loss policy when they signed up. -- David Friedman Professor of Law Santa Clara University [EMAIL PROTECTED] http://www.daviddfriedman.com/
