Avoid PSA PTSD – When Defining Terms Such as “Net Royalty Acres,” Make Sure There is a Meeting of the Minds
November 2023 – In Foundation Minerals, LLC v. Montgomery, the New Mexico Court of Appeals considered whether a Mineral Estate Purchase Agreement (the “PSA”) was enforceable. The dispute centered around the meaning of “Net Royalty Acres,” which was the formula used to determine the final Purchase Price. Montgomery (the “Seller”) argued that the term Net Royalty Acres was ambiguous enough to void the contract completely. The trial court agreed with the Seller and held that the PSA was unenforceable because the parties never reached a mutual asset or “meeting of the minds” about the Purchase Price.
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