Short-form agreements: tips and traps

Abstract

It is a common practice in the oil and gas industry for arrangements to be made by letters of intent, heads of agreement, memoranda of understanding or other short form documents; however, these less formal types of documents can suffer from inherent weaknesses that may render them invalid or difficult to enforce. Are you at risk that your pro-forma short-form agreement could turn out to be unenforceable in whole or in part? This extended abstract provides tips on how to minimise the risk that a short-form agreement will not stand up to scrutiny; it also identifies traps to avoid. Scenarios where an agreement may not constitute an agreement and the types of clauses that may be found to be invalid or otherwise difficult to enforce are also considered.