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The Contract You Thought You Made: Forfeitures and Penalties (Plus A Bonus--The Contract You Never Thought You Made…) (Part 2) ( February 2003 )
The petroleum industry has had its share of companies fall into cash flow problems or, worse, go bankrupt, especially in the 1980s after the oil price crash of 1985-86. Following these experiences, the remaining players in the industry drafted very tight and onerous (some may even say draconian) provisions to deal with a defaulting party under various agreements. It is now common to include various provisions dealing with the possibility of a party filing or being forced into bankruptcy.
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