The Texas Supreme Court recently provided an important, but simple, reminder: when a contract is unambiguous, the court will enforce it as written. No equitable rescue. No resort to business purpose. No reliance on the parties' course of conduct after signing. In Equinor Energy LP v. Lindale Pipeline, LLC, the Court reversed a $26 million jury verdict against Equinor, holding that a water supply agreement's exclusivity clause did not reach the wells at issue—because the plain language of the contract said so.

The Dispute

In 2009, Lindale Pipeline, LLC contracted with Equinor's predecessor to supply water for hydraulic fracturing operations in North Dakota through a newly constructed underground pipeline. The agreement contained the following exclusivity provision: Lindale "shall be the sole and exclusive water provider and pumper on the Pipeline." The contract also defined "Pipeline" with specificity—the freshwater pipeline, lateral lines, related facilities, well-site appurtenances, rights-of-way, easements, and permits, as further described in an attached map.

Years later, lay-flat hose technology emerged as a cheaper alternative to pipeline delivery. Equinor began sourcing water from third-party vendors who used this newer technology rather than routing water through Lindale's pipeline. Lindale sued in Texas state court, claiming the exclusivity clause gave it the right to supply all water for any of Equinor's wells connected to the pipeline system. A Harris County jury agreed, returning a $26 million verdict.

The Texas Supreme Court disagreed.

What the Court Decided, and Why It Matters

The entire dispute turned on a single textual question: did Equinor's wells fall within the phrase "on the Pipeline"? The Court concluded they did not. The contract's definition of "Pipeline" encompassed infrastructure, including pipe, laterals, facilities, rights-of-way, but not the oil wells themselves. The attached map did nothing to change that; the Court declined to read the exhibit as expanding the agreement's operative definitions. Because the wells were not "on the Pipeline," the exclusivity clause did not apply to them, and Equinor was free to buy water from whomever it chose.

The Court's analysis was spare. Finding no ambiguity, the Court applied de novo review and refused to go any further. Lindale urged the Court to consider the commercial purpose of the arrangement—after all, what was the pipeline for, if not to supply Equinor's wells?—and pointed to the parties' course of performance as evidence of how the contract was actually understood. The Court was unmoved:

“[W]e have no business rescuing parties from contracts that turned out to be bad deals in the name of utilitarianism or equity. Our job is to read the words chosen by the contracting parties.”

Three Takeaways:

1. The Scope of an Exclusivity Clause Is Precisely What the Words Make It

Exclusivity provisions are among the most commercially consequential terms in many oilfield services or midstream agreements. Yet such provisions are often drafted at a high level of generality, with parties relying on shared business understanding to fill gaps that the text leaves open. Lindale illustrates the risk attendant to such an approach.

Lindale's exclusivity clause extended only to activity “on the Pipeline,” and the Court held it meant exactly that. Whether that outcome reflected what the parties actually contemplated when they signed in 2009 is, under Texas law, entirely beside the point. Contracting parties seeking certainty should insist on exclusivity provisions that precisely enumerate: (i) the specific activities or services covered; (ii) the geographic or infrastructure scope (and whether wells, pipelines, or other assets are expressly included or excluded); (iii) any carve-outs for alternative delivery methods that may emerge over the life of the agreement; and (iv) the mechanism for handling new technology or infrastructure not contemplated at signing.

The emergence of lay-flat hose technology was not necessarily a foreseeable development in 2009. But the lesson is clear: where the commercial value of an exclusivity right depends on it reaching a defined category of assets or operations, the drafting must say so explicitly.

2. Exhibits and Attachments Only Do What the Contract Says They Do

Lindale argued, among other things, that the map attached to the agreement expanded or clarified the operative definition of "Pipeline" in a way that brought Equinor's wells within the exclusivity clause. The Court rejected the argument, noting that incorporation by reference means what it says, and an exhibit's scope and effect are determined by the language of the incorporating provision.

This is not a novel principle, but it is one that merits consideration. The operative body of a contract cannot be silently amended or expanded by an attached map, drawing, or schedule. If an exhibit is intended to define scope, that function must be clearly established in the body of the agreement. If a map is intended to enumerate the wells covered by an exclusivity obligation, the contract must expressly say so.

3. Texas Courts Will Not Rewrite a Bad Deal

Perhaps the broadest takeaway from Lindale is a reaffirmation of a principle that the Texas Supreme Court has applied with increasing consistency: if the contract is unambiguous, the court's inquiry ends at the text. Business purpose, commercial context, course of performance, and equitable considerations are not tools for construing an unambiguous agreement.  As the Court explained, it “cares about the purpose of the contract” only if it is ambiguous.