The Renaissance of Law in the Law of Oil and Gas: The Contract Dimension [reprint, first published 2004]
and Energy Journal by an authoirzed editor of University of Oklahoma College of Law Digital Commons. For moer
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The R enaissance of Law in the Law of Oil and Gas: The C ontract Dimension [reprint, first published 2004]
David E. Pierce
Mineral Law Commons
Recommended Citation
Part of theEnergy and Utilities Law Commons; Natural Resources Law Commons; and theOil
VOLUME 3
NUMBER 2
THE RENAISSANCE OF LAW IN THE LAW OF OIL
AND GAS: THE CONTRACT DIMENSION*
[reprint, first published 2004]
DAVID E. PIERCE**
* This article was originally published in the Washburn Law Journal. See David E.
Pierce, The Renaissance of Law in the Law of Oil and Gas: The Contract Dimension, 42
WASHBURN L.J. 4 (2004), available at http://washburnlaw.edu/profiles/faculty/activity/_
fulltext/pierce-david-2004-42washburnlawjournal909.pdf. The Journal would like to thank
Professor Pierce and the editorial staff of the Washburn Law Journal for their permission to
republish the article. For more information about the Washburn Law Journal, visit
http://washburnlaw.edu/publications/wlj/.
** Professor of Law, Washburn University School of Law.
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I. Introduction
After twenty years of scholarly inquiry into the discipline we call “oil
and gas” law, it appears many of the flaws associated with this
“specialized” body of law relate to its “special” status. Jurisprudential flaws
have developed as courts depart from basic contract, property, or tort law in
pursuit of “oil and gas law” concepts. The phenomenon is not limited to oil
and gas law but can occur in any “law of” setting. For example, consider
the debate presently occurring over the extent to which contract law will
govern the law of electronic commerce.1 At least with electronic commerce
a conscious debate is taking place over whether there is a need to avoid or
change basic contract law principles to accommodate particular types of
transactions.2 It appears such a debate never took place with regard to many
basic “oil and gas law” principles. This article is designed to trigger such a
debate by analyzing recent judicial approaches to recognizing and applying
“implied covenants” under the oil and gas lease. By comparing the
experience and outcomes under the oil and gas rule with the outcome under
a contract law analysis, it should be possible to evaluate whether a
specialized “oil and gas” rule is necessary or advisable.
II. Judicial Reluctance to Apply Basic Legal Concepts
Once the law associated with an industry is able to anoint itself with
“law of” status, courts become gun-shy at applying basic principles of
contract, property, and tort law to the industry’s problems. They proceed
gingerly with their legal analysis, careful to pay homage to the special “law
1. Judge Easterbrook, in Hill v. Gateway 2000, Inc., 105 F.3d 1147 (7th Cir. 1997),
cert. denied, 522 U.S. 808 (1997), takes an accommodating approach toward computer
marketing practices, arguably at the expense of traditional contract principles. Judge
Easterbrook’s “law of” approach can be contrasted with Judge Vratil’s approach in Klocek v.
Gateway, Inc., 104 F. Supp. 2d 1332 (D. Kan. 2000), where she refuses to disregard basic
contract doctrine to accommodate Gateway’s mass marketing techniques.
2. Witness the American Law Institute’s rejection of the final draft of the proposed
Article 2B to the Uniform Commercial Code and the National Conference of Commissioners
on Uniform State Laws’ adoption of the Uniform Computer Information Transfer Act. See
generally Symposium, Perspectives on the Uniform Laws Revision Process, 52 HASTINGS
L.J. 603 (2001).
2017]
of” principles, lest they be chided for their lack of insight into the unique,
often complex, analysis that has been applied by others. This is particularly
the case with oil and gas law which has been blessed with three highly
influential multi-volume treatises,3 two “oil and gas law” casebooks,4 many
single-topic treatises,5 several regional oil and gas works,6 and three major
organizations dedicated to assisting the rest of the world in understanding
what we are talking about.7 Courts often preface their analysis of an oil and
gas problem with an observation acknowledging, sometimes grudgingly,
sometimes apologetically, that it is governed by “oil and gas law.” It is as
though the court is about to leave the world of law and enter into the nether
world of quasi-law. A recent example from Kansas is found in Justice Six’s
3. EUGENE KUNTZ, A TREATISE ON THE LAW OF OIL AND GAS (1987). First published in
1904, this is a seven-volume treatise currently maintained by Professors Owen L. Anderson,
Ernest E. Smith, David E. Pierce, and John S. Lowe. HOWARD R. WILLIAMS & CHARLES J.
MEYERS, OIL & GAS LAW (2001). This eight-volume treatise, commonly known as
“Williams & Meyers on Oil & Gas Law,” is now updated and revised by Professors Patrick
H. Martin and Bruce M. Kramer; volume 8 of the treatise is also published separately as
WILLIAMS & MEYERS MANUAL OF OIL AND G (...truncated)