When is a lease agreement a binding contract?

Colorado Mineral Rights Weld County, CO
1

I have heard that a certain oil company is resending offers that were made. If the lease has been signed and is in the title process can the oil company get out of paying the agreed upon bonus?? Any info would be great!!!

2

Tom,

It depends on the lease terms. But in almost all leases there is a clause that allows them to back out of their contractual obligation. What company was it and where at?

Regards,

Derek

3

Tom:

If they are cold-drafting you (not paying bonus after accepting your signed lease) please let everyone know who they are. It is certainly unethical.

Thanks.

4

I want to give them a chance to make it right. If they do not follow through I will let everyone know who they are. I just want to know my options in persuing legal action to make them follow through with their commitment If needed.

5

What was the required payment deadline on the OFP ( order for payment)? 90 days? Have they passed this date yet? If so, they usually require the landowner to send in a written request to receive payment. Upon receiving that written letter they usually have 15 days to make payment or the lease becomes void.

Derek

6

Tom,

If you signed a lease and sent it to the land company and deposited a bank draft, the land company might pay you in accordance with the time allowed on the bank draft, usually stated in "bank" days not calendar days. If you haven't been paid when the draft time is up your best recourse is to inform the lessee that the lease is terminated for non-payment by registered mail and hope the lease has not been recorded.

Next time, and I think there will be a next time, make certain you get paid before turning over a signed lease to the lessee. there are many ways to do so. Read up on it on MRF or ask on e of the knowledgeable contributors.

7

We signed a lease and sent it to the land company and while the lease was in the title department the oil company decided to not honor their side of the lease. It seems that the lease agreement only protects the oil company from me backing out and does not protect me from them backing out. The issues is the bonus dollars that were agreed upon and then not paid.

8

When was your bonus payment due? It’s business days from date of sight (meaning day their bank receives draft). You can’t count weekends or holidays. Really it’s banking days. Example - 30 day sight draft might take 2 calendar months to pay. Good luck.