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Simple English definitions for legal terms
gap filling
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A quick definition of gap filling:
Gap filling is when a contract doesn't have all the information needed to be carried out, so a court has to figure out what the missing parts should be. The court looks at what the parties probably meant when they made the contract and uses rules to fill in the gaps. These rules are found in the Uniform Commercial Code and help the court decide what the parties would have agreed to if they had thought about it. The court looks at things like what the contract says, how the parties have acted before, and what is normal in the industry.
A more thorough explanation:
Gap filling is the process of adding missing terms to a contract when the contract does not specify all the necessary details for the contract to be carried out. Courts use gap filling rules to do this. The rules are based on the assumption that parties who create a contract intend to agree to any conditions that make the contract possible.
If possible, the court will interpret the contract in a way that does not leave any gaps. However, if there are missing provisions, the court can still find that a contract exists and apply gap filling rules. These rules are found in Article 2 of the Uniform Commercial Code (UCC) and focus on determining the parties' intentions at the time they entered the contract.
To determine the parties' intentions, courts look at the contract itself, prior dealings between the parties, trade usage, and prior performance, among other factors.
Suppose a company agrees to purchase goods from a supplier but does not specify the delivery date. The court can use gap filling rules to determine a reasonable delivery date based on the parties' prior dealings, trade usage, and other relevant factors.
Another example is when a contract does not specify the price of goods or services. The court can use gap filling rules to determine a reasonable price based on the parties' prior dealings, trade usage, and other relevant factors.
These examples illustrate how gap filling works in practice. When a contract is missing important details, the court can use gap filling rules to fill in the gaps and ensure that the contract can be carried out.