In general, Texas courts will enforce contracts — including oil and gas contracts — as those contracts are written unless the contract violates statutory law or public policy. These principles apply equally to choice of law provisions that may be inserted into oil and gas contracts. A recent case from the Court of Appeals from the Fort Worth district is a good example. In North American Tubular Service, LLC v. BOPCO, L.P., 2018 WL 4140635 (Tex.Civ.App.- Fort Worth, 2018) the Court of Appeals rejected the argument that New Mexico law applied to indemnity provisions in an oilfield master services contract; the parties contracted for Texas law to apply to any disputes and there was no public policy or other reason to reject that contracting choice.
Texas Oil and Gas Contracts: Choice of Law Principles
In today’s complex economy and given that oil and gas exploration and production is a nation-wide industry, choice of law issues are common. Because each state has its own set of laws, depending on the circumstances of the lawsuit, different state laws might apply to a given circumstance and when a case is filed, courts must choose which state laws apply. Recognizing which law applies can be important, and so it is common for legal practitioners to insert choice of law provisions into contracts as standard “boilerplate.”
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