Article 138 of the Mineral Code: a reasonable cause for nonpayment of royalties
Louisiana courts have had difficulty with suits involving untimely payment or nonpayment of mineral leases, which ordinarily do not fix a specific date for the payment of production royalties. The Mineral Code makes it incumbent upon a lessor to put his lessee in default prior to seeking judicial relief for the latter's failure to pay royalties. The use of more properly drafted leases containing clauses granting lessees authority to withold production royalties under certain circumstances may avoid much litigation and dispute. Otherwise the courts must determine whether the lessee had a reasonable cause for nonpayment. Lease cancellation should be eliminated entirely as a remedy in royalty nonpayment disputes since the Mineral Code provides an alternative and adequate remedy. 123 references.
- OSTI ID:
- 6712843
- Journal Information:
- La. Law Rev.; (United States), Journal Name: La. Law Rev.; (United States) Vol. 43:5; ISSN LLRED
- Country of Publication:
- United States
- Language:
- English
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