RPL Exam Ch 6 Study Questions & Answers 2024/2025
If no royalty is paid for several months, does the lease terminate? - ANSWERSGenerally no. Failure to pay royalty (with some exceptions) is a correctable breach. Royalty is a covenant under common law, not a condition.
A dispute arises as to...
If no royalty is paid for several months, does the lease terminate? - ANSWERSGenerally no. Failure to pay
royalty (with some exceptions) is a correctable breach. Royalty is a covenant under common law, not a
condition.
A dispute arises as to the title to a property. Can the lessee/purchaser suspend the royalty payments
without paying interest? - ANSWERSGenerally yes. Rely on warranty language as your rationale
Royalty is being held in suspense awaiting the outcome of the Quiet Title suit in Q2. Is it real or personal
personal property? - ANSWERSOil produced is personal property; minerals in the ground are real
property.
A lease expires on its own terms. Doe the lessee have an obligation to release? - ANSWERSNo; however,
know the rules of the State as some do require & some lessors include provisions as such
No date appears at the top of a lease. The husband acknowledged the lease on Jan 15, 1992, the wife
acknowledged it on Jan 17, 1992. What is the effective date of the lease? - ANSWERSJanuary 15, 1992
A lease is dated 1/15/1988 & has a primary term of one year from that date. When does the lease
expire? - ANSWERS1/15/1989 @ midnight; if the language had said "term of one year", the lease would
expire at midnight 1/14/1989
A lease requires that operations be commenced by the end of the primary term. Will dirt work hold the
lease? - ANSWERSYes-dirt work is operations. If the lease said drilling, then no.
The Lessee moves onto location and builds a pad. Is he obligated to pay surface damages to the owner if
the minerals are severed? - ANSWERSNot required by common law, but industry practice and local
ordinance in addition to lease riders usually creates payment
, A lease has an "or" delay rental clause and delay rentals are paid late. Is the lease terminated? -
ANSWERSNo, because or form of delay rental clause requires that a release be filed before the rental
payment date in order to avoid the rental payment obligation. This form of delay rental clause is not
frequently used.
A lease has an "unless" delay rental clause and delay rentals are paid late. Is the lease terminated? -
ANSWERSYes, because lunes form requires that the rental be made timely & accurately for the lease to
be extended during primary term into the next year
Delay rental are mailed timely (unless form). The lessors bank accepts & deposits the delay rental check
for $79.25 even though the lease called for $80.00. Does the bank's accept b ind the lessors? -
ANSWERSNo, payment must be what is stated on the lease
Delay rentals in the proper amount are mailed timely but the bank credits the delay rental to the wrong
account. Is the lease terminated? - ANSWERSNo, that is between the lessor and the bank.
Lessee drills and completes a well as a gas producer on the date the lease is to expire. There is no gas
market so the well is shut in for more than a year. No shut in payment was made. Has the lease expired?
- ANSWERSYes, shut-in payments are a condition by common law & must be made to maintain the lease
Lessee drills a dry hole two weeks prior to the last delay rental payment due date during the primary
term. Does lessee need to make additional delay rental payments to maintain the lease? -
ANSWERSProbably not. But what if it were drilled 6 month prior to due date? Know your window.
A minor misrepresents that he is an adult when executing a lease. Payments are made to him. Can he
claim that the lease is invalid when he reaches the age of majority? Before he reaches the age of
majority? - ANSWERSYes and yes
A person of unsound mind executes the lease. Payments are made to him under the term of the lease.
Can he claim that the lease is invalid? - ANSWERSYes, the lease is void; it was never valid
A lease in its extended term ceases to produce. How long does the lessee have to commence further
operations on the lease? What if the lease contains no temporary cessation of production clause? -
ANSWERSRefer to the cessation clause for the time frame
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