Title defect provisions are among the most intensely negotiated aspects of purchase and sale agreements ("purchase agreement") and exchange agreements for oil and gas properties. There are numerous ways to approach handling title defects beyond the obvious desire of the seller to complete the deal with minimal title adjustments and the buyers desire to have the right to such adjustments if it discovers title issues. The approach depends in part on the type, size, and complexity of the transaction involved and on the buyer s post-closing development plans for the properties. This chapter discusses the issues that typically arise in negotiating title defect provisions in purchase agreements.
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