The warranty clause: standing behind your title
A warranty clause says you will defend the title you are leasing. If it turns out you owned less than the lease says, a general warranty can let the company recover from you, often by holding back royalty.
What it does
Most printed forms carry a general warranty: you stand behind the title against everyone, even for problems that came before you. Owners who inherited minerals, or are not sure of their exact share, may be warranting things they cannot know.
Narrower versions are common: a special warranty "by, through and under" you, which covers only your own acts, or no warranty at all. The company still checks title before it pays.
The warranty often sits next to the clause that reduces royalty if you own less than all of the minerals. That reduction is normal. The warranty is the part to read closely.
What we mark on a review sheet
Normal
- A clause reducing royalty in proportion if you own less than the full mineral interest.
Missing
- Any limit on the warranty.
Ask about
- A general warranty of title, especially on inherited minerals.
- Language letting the company pay your taxes or liens and take the money from your royalty.
Questions to ask the company
- Will you change the warranty to "by, through and under" me only, or drop it?
- How much of the minerals do you show me owning, and from what records?
- If title turns out short, will you reduce the bonus and royalty in proportion and nothing more?
Common questions
What does the warranty clause in an oil and gas lease mean?
It is your statement that you will defend the title you are leasing. With a general warranty, if you owned less than the lease says, the company may be able to recover from you.
Can I lease without a warranty of title?
It is a common ask. Many owners request a special warranty, covering only their own acts, or none. The company checks title before paying either way.
Send it before you sign
Tell us what you got and what you want to know. We reply by email and tell you how to send the pages. A landman reads them and sends back a one-page review sheet.
Email hello@landman.review with what you got and your question, or call (307) 263-8515.