The Habenum Clause Determines the Duration of the Lease Unless Properly Modified by Other Provisions of the Lease
Hanna, Richard L.
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The Texas Supreme Court in Gulf Oil Corp. v. Southland Royalty Co. reviewed an oil and gas lease dispute where the lessee sought to extend the lease beyond the fifty year period state in the habendum clause to allow for delays and interruptions occasioned by compliance with the Texas Railroad Commission. The Court held that because the duration of the lease is “traditionally determined by the habendum clause,” section seven was not relevant in computer the expiration date. Instead, section seven was only intended to excuse Gulf from forfeiting the lease during the fixed term in the event Gulf was prevented by any of the enumerated causes in section seven from meeting its duties to operate the lease. Ultimately, the author concludes that in the absence of specific extension clauses within an oil and gas lease, the courts abide by the principle that the parties bind themselves to the fixed terms of the habendum clause.