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PRINTER'S NO. 2176
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1914
Session of
2021
INTRODUCED BY WEBSTER, SANCHEZ, FREEMAN, MILLARD, LEE, CIRESI
AND DELLOSO, SEPTEMBER 27, 2021
REFERRED TO COMMITTEE ON ENVIRONMENTAL RESOURCES AND ENERGY,
SEPTEMBER 27, 2021
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:
"Landowner." An individual or group of individuals who has
interest in real property or is named on the deed or title of
the real property.
"Real property contract" or "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
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lease of real property.
Section 3. Test of readability.
(a) General rule.--A real property 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.
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(10) The contract should not use sentences with double
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) General rule.--A real property 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.--Any land broker, landman,
oil company or gas company who executes a real property contract
which 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.
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(5) Any equitable and other relief ordered by the court.
(b) Enforcement.--A violation of this act is deemed to be a
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 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 real property contracts that are executed,
solicited or intended to be performed after the effective
date of this section.
(2) A renewal, extension, option or change in the terms
of an existing contract after the effective date of this
section.
Section 8. Effective date.
This act shall take effect in one year.
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