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Application of Contract Law Principles to the Purchase and Sale Agreement

Hugh M. McIntosh, Oil and Gas Agreements (1983)




Sales of oil and gas properties are quite common in good and marginal times. Lawyers working in the oil and gas industry often are called upon to play an important role in developing marketing strategies for property packages, preparing information for evaluation and participating in the exchange of communications and negotiations leading to definitive agreement documentation. Upon execution of a purchase and sale agreement which embodies the complete business trade, lawyers typically become the principal parties involved in preparing for the closing.

This presentation is designed to assist men and women acting out their roles as lawyers in the phases of a proposed sale or acquisition of oil and gas assets by unearthing some basic principles of contract common law and applying them to a complex legal document — the Purchase and Sale Agreement — and the negotiations which precede this Agreement.

The Restatement (Second) of Contracts

The main text for this presentation is the American Law Institute's Restatement of the Law (Second) of Contracts. It is a fascinating work. Now that my familiarity with it has increased, thanks to preparation for this meeting, I plan to use it more frequently in my practice and recommend it to you.

Its format is particularly