What's the Deal?

01 August 2013 Publication
Authors: Mike Seely

Well Servicing Magazine

When a customer phones in an order to an oilfield service company, usually somebody needs something quickly. Urgency and “customer relations” tend to override any thought to negotiate up front how the parties intend to allocate risk if an accident occurs. Nevertheless, service companies frequently get sued for millions of dollars, even if they only charged a few hundred dollars for their work. 

Liability protection

A service company’s best protection from excessive liability is a master service agreement entered into prior to beginning the work. This is not always practicable. As such, the industry traditionally relies upon terms and conditions printed on its forms to manage risk. Terms and conditions typically contain standardized provisions, sometimes (unfairly) described as “fine print.” The language covers details concerning payment, delivery and also a variety of risk-allocating matters, such as warranties, disclaimers and indemnities. 

Every single major oilfield service company utilizes terms and conditions as part of its risk management program. This fact is a testament to the usefulness of this important device. Without a master service agreement in place, terms and conditions may be all that keeps a service company from significant and potentially catastrophic exposure to liability. As an industry, relying upon terms and conditions is justified because a service company’s profit is limited to its day rate or rental charge. Successful well owners do not share profits with their service providers — this limited upside makes it fair for a service company to insist upon capped risk.

Read More.

Insights

RCE PTA Carve-Out Resumes After Interference
18 September 2019
PharmaPatents
The Ninth Circuit Expected to Rule that Doctors Can Be Wrong in the Winter v. Gardens False Claims Act Case
18 September 2019
Legal News: Government Enforcement Defense & Investigations
Upcoming Webinar: Maximizing Solar Tax Credits - Navigating the Start of Construction Rules (Part 1)
17 September 2019
Renewable Energy Outlook
When Birds Finally Find a Nest
17 September 2019
Dashboard Insights
Lacktman, Ferrante Cited in mHealth Intelligence About Ryan Haight Act
19 September 2019
mHealth Intelligence
Tinnen Discusses How Viewpoint Diversity Helps Businesses Thrive
18 September 2019
InsideTrack
Vernaglia Comments on AHA v Azar Decision
18 September 2019
MedPage Today
Lach Comments on Launch of New Group
16 September 2019
BizTimes Milwaukee
MedTech Impact Expo & Conference
13-15 December 2019
Las Vegas, NV
Review of 2020 Medicare Changes for Telehealth
11 December 2019
Member Call
BRG Healthcare Leadership Conference
06 December 2019
Washington, D.C.
CTeL Telehealth Fall Summit 2019
04-06 December 2019
Washington, D.C.