Law Commons^™

Recent Significant Cases Affecting Farmout Agreements, John S. Lowe

Faculty Journal Articles and Book Chapters

As this author observed in 1987, farmors' and farmees' mutual interest in maximizing available tax benefits causes the structure of farmout agreements to be very much the same, or at least fall into discernable patterns. Farmout substantive provisions, however, vary widely. The difference in substantive provisions results in part from the different goals that farmors and farmees seek when they enter into agreements. In part, the differences are reflexive; once one encounters a problem, one drafts to avoid it in the future. In part, also, the differences show the creativity of American businessmen and their lawyers in deal-making.

The cases …