PRINTER'S NO. 642
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
698
Session of
2023
INTRODUCED BY WEBSTER, MADDEN, PROBST, SANCHEZ, DELLOSO, BURGOS
AND CIRESI, MARCH 24, 2023
REFERRED TO COMMITTEE ON ENVIRONMENTAL RESOURCES AND ENERGY,
MARCH 24, 2023
AN ACT
Providing for plain language requirements in oil and gas real
property contracts, for remedies and for penalties.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Short title.
This act shall be known and may be cited as the Plain
Language Oil and Gas Real Property Contract Act.
Section 2. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Contract." A written agreement between a landowner and an
oil and gas land broker, landman, oil company or gas company for
the sale, transfer, conveyance or lease of real property.
"Landowner." An individual or group of individuals with
interest in real property or named on the deed or title of the
real property.
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Section 3. Test of readability.
(a) General rule.--A contract shall be written, organized
and designed so that the contract is easy to read and
understand.
(b) Language guidelines.--In determining whether a contract
meets the requirements of subsection (a), a court shall consider
the following language guidelines:
(1) The contract should use short words, sentences and
paragraphs.
(2) The contract should use active verbs.
(3) The contract should not use technical legal terms
other than commonly understood legal terms.
(4) The contract should not use Latin and foreign words
or any other word when its use requires reliance upon an
obsolete meaning.
(5) The contract must define industry-specific terms
whose definitions have meanings which are not commonly
understood.
(6) The definitions of words defined in the contract
should be defined by using commonly understood meanings.
(7) When the contract refers to the parties to the
contract, the references should use personal pronouns, the
actual or shortened names of the parties, the terms "seller"
and "buyer" or the terms "lessor" and "lessee."
(8) The contract should not use sentences that contain
more than one condition.
(9) The contract should not use cross references, except
cross references that briefly and clearly describe the
substances of the item to which the reference is made.
(10) The contract should not use sentences with double
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negatives or exceptions to exceptions.
(c) Visual guidelines.--In determining whether a contract
meets the requirements of subsection (a), a court shall consider
the following guidelines:
(1) The contract should have type size, line length,
column width, margins and spacing between lines and
paragraphs that make the contract easy to read.
(2) The contract should caption sections in boldface
type.
(3) The contract should use ink that contrasts sharply
with the paper.
Section 4. Notarization of contracts.
(a) Execution.--A contract shall be signed by the landowner
in the presence of a notary public in this Commonwealth.
(b) Receipt of contract.--The landowner and buyer or lessee
shall receive a notarized copy of the contract.
Section 5. Damages, enforcements, assurance of voluntary
compliance and civil penalties.
(a) Damages and other remedies.--An oil and gas land broker,
landman, oil company or gas company that executes a contract
with a landowner that does not comply with the test of
readability provided under section 3 is liable to the landowner
for all of the following:
(1) Compensation in an amount equal to the value of any
actual loss caused by the violation of this act.
(2) Statutory damages of $10,000.
(3) Court costs.
(4) Reasonable attorney fees.
(5) Any equitable and other relief ordered by the court.
(b) Enforcement.--A violation of this act is deemed to be a
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violation of the act of December 17, 1968 (P.L.1224, No.387),
known as the Unfair Trade Practices and Consumer Protection Law.
Section 6. Limitations on liability.
(a) Limitation generally.--There shall be no liability under
section 5 if any of the following occur:
(1) The landowner wrote the contract or part of the
contract that violates this act.
(2) The oil and gas land broker, landman, oil company or
gas company made a good faith and reasonable effort to comply
with this act.
(b) Time limit to file lawsuit.--A lawsuit under this act
must be filed within 10 years from the date on which the
contract was signed.
Section 7. Applicability.
This act shall apply to the following:
(1) All contracts that are executed, solicited or
intended to be performed on or after the effective date of
this section.
(2) A renewal, extension, option or change in the terms
of an existing contract on or after the effective date of
this section.
Section 8. Effective date.
This act shall take effect in one year.
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