Modern Applications of the Rule Against Perpetuities to Oil and Gas Transactions: What the Duke of Norfolk Didn't Tell You
The venerable Rule Against Perpetuities has been plaguing property lawyers for over 300 years. Oil and gas attorneys need to know the types of transactions which are covered by the Rule because as John Chipman Gray once said, the Rule is to be remorselessly applied to void interests which vest or fail to vest within a life in being plus twenty one years. The author gives the oil and gas attorney a short historical view of the development of the Rule, followed by the generally accepted reasons that underlie the Rule's long life. The author then analyzes the major types of transactions which have run into Rule difficulties. Finally, the author suggests that while a number of authorities have argued that the Rule should not apply to 'commercial' transactions, such as many oil and gas transactions, he concludes that the Rule should be applied in those situations where the purpose of the Rule in preventing remotely vesting interests from taking mineral estates out of the stream of commerce will be achieved.