Does direct deposit preclude right to dispute or contest?

We are advised to not sign up for direct deposit of our royalties - and receive checks instead - because direct deposit could preclude our ability to later dispute or contest an underpayment. Whereas by holding an uncashed check we preserve rights to dispute or contest.

Is that right? Thank you.

P.S. - Is there a Texas statute or regulation that addresses this?

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@InquiringNewbie regardless you should still get record of your check stubs.

Thanks for your reply. Yes, we’ll still get the record of our check stubs. What we’re hearing is that direct deposit of a royalty check is the equivalent of depositing a check that has written on it words to the effect that depositing or cashing the check is satisfaction and release of any future claim that the check was an underpayment.

@InquiringNewbie I understand now. That is a good question & unfortunately I do not know the answer to that!

In short, no that is not correct.

NARO TX is hosting a webinar on that very topic on February 21. The NARO website has links to sign up.

Many direct deposit agreements provide that the oil company is not responsible if the bank delays the deposit or puts it in wrong account. That is not the same as being able to review and question the volumes, sales, tax and other charges, and decimal. You are limited to four years to audit underpayment of royalty under Texas statute of limitations.

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