Implied Covenant of Protection Against Drainage

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Implied Covenant Of Protection Against Drainage


In Sheffield v. Exxon Corp., 424 So.2d 1297, 1304 (Ala. 1982), the Alabama Supreme Court held:

There is an implied covenant in a lease of oil property that the lessee will do nothing to impair the value of the lease, and must use reasonable care to protect the lessor from damage or loss by the affirmative act of such lessee. This implied obligation has been extended to include, in the absence of express stipulation, a duty to drill offset wells if practicable and profitable.

Copyright 2011 by Edward G, Hawkins. All rights reserved.