• The Contract You Thought You Made -- Part 2 -- Forfeitures and Penalties - Plus a Bonus - The Contract You Never Thought You Made!
  • June 18, 2003
  • Law Firm: Thompson & Knight LLP - Dallas Office
  • No one likes to be in business with a deadbeat partner who does not pay its bills on time. The petroleum industry has had its share of companies fall into cash flow problems or, worse, go bankrupt, especially in the 1980s after the oil price crash of 1985-86. Following these experiences, the remaining players in the industry drafted very tight and onerous (some may even say draconian) provisions to deal with a defaulting party under various agreements. It is now common to include various provisions dealing with the possibility of a party filing or being forced into bankruptcy.