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Endeavor Natural Gas III, LLC v. Comanche Maverick Ranch Investments, L.P.
The Fourteenth Court of Appeals affirmed summary judgment for a south Texas landowner, holding that surface use agreement language requiring seismic operations "only after" the parties entered into a "mutually agreed-upon seismic surface use permit" created an enforceable condition precedent with no implied duty to negotiate. Endeavor Natural Gas III, LLC argued the provision was an unenforceable agreement to agree and alternatively that Comanche Maverick Ranch Investments, L.P.'s refusal to negotiate excused performance, but the court held "mutually agree" gave each party an independent right to withhold consent.
Analysis
Fourteenth Court Holds 'Mutually Agreed' Seismic Permit Provision Creates Enforceable Condition Precedent with No Duty to Negotiate
The Fourteenth Court of Appeals affirmed summary judgment for a south Texas landowner, holding that a surface use agreement provision requiring Endeavor Natural Gas to obtain a "mutually agreed-upon seismic surface use permit" before conducting geophysical operations was an enforceable condition precedent. The court rejected Endeavor's arguments that the provision was an unenforceable agreement to agree or that Comanche's refusal to negotiate excused performance.
Fourteenth Court Enforces 'Mutually Agreed' Seismic Permit Requirement as Condition Precedent, Rejecting Operator's Duty-to-Negotiate Theory
The Fourteenth Court of Appeals affirmed summary judgment for a south Texas landowner, holding that surface use agreement language requiring seismic operations "only after" the parties entered into a "mutually agreed-upon seismic surface use permit" created an enforceable condition precedent with no implied duty to negotiate. Endeavor Natural Gas III, LLC argued the provision was an unenforceable agreement to agree and alternatively that Comanche Maverick Ranch Investments, L.P.'s refusal to negotiate excused performance, but the court held "mutually agree" gave each party an independent right to withhold consent.
Fourteenth Court Enforces 'Mutually Agreed' Seismic Permit Requirement as Condition Precedent, Rejecting Implied Duty to Negotiate
The Fourteenth Court of Appeals held that a surface use agreement's requirement that Endeavor Natural Gas conduct seismic operations "only after" entering into a "mutually agreed-upon seismic surface use permit" with landowner Comanche Maverick Ranch constituted an enforceable condition precedent that had not been satisfied. The court rejected Endeavor's arguments that the provision was an unenforceable agreement to agree and that Comanche's refusal to negotiate excused compliance with the condition precedent.