When deciding whether to leave a gap in a contract, the parties should consider

Question

When deciding whether to leave a gap in a contract, the parties should consider all of the following except:

the probability of an event occuring that will give rise to a loss

the magnitude of the losses that could occur

the cost of addressing the possible events in the contract

the gap-filling rules used by the court

All of the above should be considered

the probability of an event occuring that will give rise to a loss

the magnitude of the losses that could occur

the cost of addressing the possible events in the contract

the gap-filling rules used by the court

All of the above should be considered

Explanation / Answer

When deciding whether the parties involved might leave a gap in the contract, they should consider all of the mentioned options. This is because even if any one of them is not considered, it might lead to a huge risk being undertaken by the parties, for example, it might lead to parties missing out on payments which they expect one another to make. Hence the correct answer is (E) i.e all of the above

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