Is the lessor of a top lease at risk for personal liability if others have valid (e.g. held by production) rights that would be contested?
An attorney would have to answer that, but I would never warrant the title on a lease. Not a fan of top leases… An Overview of Recurring and Related Issues Involving Top Leasing.pdf (210.2 KB)
Always have a “NO Warranty” statement in your lease exhibit… And Top Lease is not good idea generally.
Aside from warranties, I was concerned with ancillary liabilities like interference with contractual rights. I practiced law for a long time, saw a few cases involving the concept, wondered if it might be involved here. It would make an interesting
A case in point is now pending in Texas SCourt. Point Energy v MRC Permian. Not Oklahoma and a bunch of other issues involved. Might not get to the key question re: true top leases that are contingent on validity of bottom lease.
BTW, Oklahoma does recognize the tort in general. So, interesting trails in the pathways of law.
I note that in theory a top lease cannot interfere with the bottom lease because it traditionally contains a clause making the top lease contingent on invalidity of existing leasehold rights. And that is one of the questions certified in the MRC Energy case. So, being contingent on lack of opposing rights it cannot then interfere. I think this question arises in cases of Trespass to Settle Title.
That should be Point Energy v MRC.
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