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Contract Enforcement

Elizabeth “Becky” Miller, Oil & Gas Agreements: Contracting for Goods, Services, and People (2013)

In negotiating and finalizing contracts used frequently in the oil and gas industry (“Industry Contracts”), parties are generally free to agree on any terms, so long as they are not immoral, illegal or unethical. That limited prohibition gives parties tremendous opportunities to craft agreements that fit their unique circumstances and goals, so long as they can agree. However, even when they agree at the beginning of a contractual relationship, it is not unusual to see the parties disagree later on. This paper will look at ways the parties can contract upfront to define what will be considered a breach of the contract, whether there will be any limits on common law defenses to avoid a contractual obligation, limits on damages available as a remedy or punishment for breach of a contract, what laws will be used to enforce the contract, where venue may be set for future disputes arising under the contract, and whether to provide for alternative dispute resolution to resolve those future disputes. Because of the scope of this paper and its reliance on common law as well as statutory or federal law, it is not feasible to cover every producing state's rules, regulations or laws, or even to compare each to a standard. However, many states' laws regarding Industry Contracts or contractual rights in general, spring from the same common law basis, or are governed by almost universally ad