Shale Energy Law Blog
The property owners sought forfeiture and cancellation of the lease and argued that the assignment of the lease breached the trade-sale clause. The trial court found that the trade-sale clause was breached by the assignment, but did not order forfeiture. The appeals’ court agreed and noted that forfeiture is an appropriate remedy only in certain, limited circumstances. To establish that forfeiture is appropriate the lease must specifically so provide and the legal damages resulting from the breach must be inadequate. Neither of these elements were present in the case, so the appeals court did not order forfeiture of the lease.