What Can We Learn from an Oil Tycoon? Lessons on Estate Management and Contracts

Autry Stephens, the founder and owner of Endeavor Energy Resources, struck a deal in February of 2024 that would have made him America’s richest oilman and one of the world’s 100 wealthiest people, but he died before the deal closed. A cancer diagnosis spurred Stephens’s decision to cash out and sell his company for $26B (that’s a B!). Stephens was 86 when he died mid-contract last week.

So, What Can We Learn from This Pre-Closing Death?

The personal representative of an estate has the fun task of determining whether a contract is enforceable on the estate, if it expired (along with the decedent), or if it is a contract to make a Will.

As can be expected (sometimes the law makes sense), if the agreement specifies that the contract is intended to survive the death of the parties, the personal representative has the duty to carry out the decedent’s contract. Most well-drafted agreements include survival language for this very reason; we typically want the deals to go on.

Note: We do want to be very careful that the survival language doesn’t create a contract to create a will under FL Section 732.701. A contract during life to include certain terms and/or beneficiaries in a will in exchange for goods or services must be in writing and signed by the agreeing party in the presence of two attesting witnesses (the same formalities as a last will). This is a significantly higher standard than what is necessary for a normal contract. Most normal contracts are simply signed or signed and notarized; we hardly ever have witnesses to our contracts. If a contract to create a will doesn’t have the formalities of a last will, it may be deemed invalid.

When an Agreement is Silent on Survival Language

If an agreement is silent and does not include survival language, case law tells us the question to ask is:

“Can the personal representative perform as fully and as well as the decedent might have?”

A personal representative can properly refuse to perform a decedent’s contract when it is “personal” to the decedent. For example, a lease extension agreement is considered personal and not enforceable by the personal representative. So far so good!

The personal representative has a duty to carry out the decedent’s non-personal contracts, and if they fail to do so, they may be compelled to pay damages with the assets in their hands.

What About a Real Estate Transaction?

Typically, there is a due diligence period of time between the signing of a real estate sales contract and title closing. In most cases:

• If the seller passes away: The contract they signed is still valid. While the deceased seller cannot sign the closing documents, the personal representative is responsible for the seller’s obligations. The buyer has the right to take ownership of the property at closing, according to the terms of the contract. If the buyer doesn’t want to wait the probate period for the personal representative to be appointed, in most cases, the contract can be terminated and the buyer will have their earnest money returned.
• If the buyer dies before title closing: The contract they signed is binding, but the seller may not be able to enforce the contract. Quite often, the seller’s only remedy is to keep the earnest money deposit. In short, if the seller dies before the title closes, the deal does not necessarily die with them. But if the buyer passes, the sale is very likely just as dead.

Key Takeaway

So, there you have it! We learn that just like in show business, in law, the show must go on (wherever possible and within certain terms). If you’re unsure if your contract has survival language, make sure you review the terms with your gorgeous attorney! LOL