The contract of sale for the property mentions that you, the seller, intend to reserve the hard minerals, but not the oil and gas beneath the property. The deed to close the transaction contains no reservation of anything.
Shouldn’t the reservation in the contract of sale put the buyer on notice of the your intent to reserve the minerals? That’s what the buyer gargued to the court. But it doesn’t. The seller retained the hard minerals.
As title lawyers know, a purchaser is bound by every recital, reference and reservation contained in or fairly disclosed by any instrument which forms an essential link in the chain of title under which he claims. However, this court chose not to agree that the contract of sale was an essential link in the buyer’s chain of title. Rather, it was no link at all. When the deed was signed, the contract of sale was merged into the deed and thus, in essence disappeared.
This case reminds those of us who prepare contracts, and the others of us who intend to be bound by them, to slow down, read the document carefully, and be certain it says what we intend for it to say.