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Ohio Appeals Court Enforces Lease Provision Disclaiming Implied Covenants

The Fifth District Court of Appeals held in a recent decision that a general disclaimer of implied covenants in a lease effectively disclaims any implied covenants to reasonably develop the leased property. In Bilbaran Farm, Inc. v. Bakerwell, Inc., the plaintiffs claimed that the lessees to the oil and gas lease breached the lease by not developing all portions of a 275 acre tract of land. The trial court dismissed the plaintiffs’ complaint citing the general disclaimer language in the lease. The Court of Appeals agreed that the general disclaimer was sufficient to disclaim any obligation to reasonably develop the undeveloped portions of the leasehold.