Opinion ID: 1117446
Heading Depth: 1
Heading Rank: 10

Heading: Drummond and United's Business Relationship After the 1972 Agreement

Text: After Drummond and United executed the 1972 agreement, the four original leases continued in effect. We have concluded above that the express language of the 1972 agreement was insufficient to alter or to impact the termination dates of the four original leases. We also have concluded that the will-extend and will-lease clauses were an unenforceable agreement to agree or, at most, created a two-year option in favor of Drummond to extend the dates of those original leases and a two-year option to enter into leases regarding certain lands owned by United and located in the Warrior Coal Basin. However, we find nothing to indicate that Drummond ever exercised its will-extend option. After the execution of the 1972 agreement, Drummond and United did not enter into any agreements that can be characterized as supplying the information missing from the 1972 agreement regarding a date certain for the will-extend clause. We recognize that Drummond and United were both operating under the mistaken belief that the 1972 agreement had created an indefinite or open-ended term for those leases and, therefore, that both Drummond and United were unaware of the need to take further action regarding the effective dates of the four original leases. However, as discussed above, the 1972 agreement could not, as a matter of law, work as an indefinite extension of those leases. We do find evidence indicating that Drummond and United took action that could be construed as effectuating the will-lease option granted to Drummond. After the execution of the 1972 agreement, United granted Drummond the right to surface-mine other properties owned by United in addition to those properties identified in the four original leases. This was effectuated by Drummond and United's executing modification agreements to the four original leases. However, these modification agreements did nothing more than add additional land to the scope of the four original leases; they did not extend the term of those leases or otherwise alter the terms of those leases. Therefore, after the execution of the 1972 agreement, Drummond and United continued operating under the express provisions of the four original leases, as modified, until the stated expiration dates of those leases.