Texas Supreme Court Confirms that Industry Customs cannot Qualify Unrestricted ‚ÄéConsent to Assign Provisions

On June 28, 2019, in Barrow-Shaver Resources Co. v. Carrizo Oil & Gas, Inc.[1], the Texas Supreme Court confirmed that industry customs cannot qualify an unrestricted consent-to-assign provision contained in a farmout agreement, nor is such a provision subject to any implied duty of good faith or fair dealing. The ruling was hotly contested, evidenced by both the 5-4 decision and the multitude of letters received by the court from industry players.

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