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Smith v. Arrington Oil & Gas, Inc.

United States Court of Appeals for the Eighth Circuit
664 F.3d 1208 (2012)


Arrington Oil & Gas, Inc. (Arrington) (defendant) presented oil and gas lease agreements to Smith and other landowners (plaintiffs). The leases granted Arrington mineral rights from each of the plaintiffs in exchange for cash bonuses. The cash bonuses came in the form of bank checks, which were attached to the proposed leases. The bank checks stated that they were payable upon Arrington’s approval of the leases and titles. The plaintiffs signed the leases and returned them to Arrington. Arrington did not approve the titles and did not make payments on the bank checks. The plaintiffs sued for breach of contract. Arrington claimed that it never approved the leases. Arrington admitted that its decision not to approve the titles was based on a desire to terminate the transactions for business reasons. The district court granted Smith’s motion for summary judgment, and Arrington appealed.

Rule of Law


Holding and Reasoning (Gruender, J.)

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