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A modification must be supported by legally sufficient consideration, or a substitute therefor, and meet the requirements for contract formation. Without consideration or a valid substitute, there can be no modification of a lease.
Plaintiff owned approximately 2,255 acres of land in Western Pennsylvania that it has leased for oil and gas production leased to defendants. Plaintiff contended that defendants have breached the terms of their contract and tortiously converted portions of plaintiff’s royalty payments. Plaintiff filed a class action on behalf of itself and other similarly situated oil and gas leaseholders. Defendants moved for summary judgment on all claims against them. Plaintiff moved for partial summary judgment.
Was the plaintiff entitled to partial summary judgment?
Plaintiff failed to establish there was consideration for the purported permanent alteration to the lease. It failed to prove its claims of breach of contract about the general deduction of post-production costs from royalties as the lease explicitly permitted assessment of such costs