Over the past several months, the Texas Business Court has issued a series of energy-industry contract decisions with a common theme: The words on the page control. Courts are enforcing conditions, deadlines, defined terms, remedy provisions, survival clauses, and choice-of-law clauses according to their text—not according to what one side or the other says the deal should have meant.

That is not to suggest that context no longer matters. Texas courts still read contracts as a whole. They still harmonize provisions. They still avoid constructions that render negotiated language meaningless. But as these recent decisions make clear, none of those interpretive tools allows a court to rewrite an unambiguous bargain.

1. Choice of law matters, but plain language controls

Westlake Longview Corp. v. Eastman Chemical Co., 2026 Tex. Bus. 26 (11th Div. May 13, 2026). 

The dispute arose from a 2006 transaction in which Eastman sold Westlake its Longview, Texas, polyethylene facilities and the pipeline connecting Longview to Mont Belvieu. The parties' long-term Ethylene Sales and Exchange Agreement (ESA) gave Westlake the right to purchase Eastman's "Excess Ethylene Quantities," while Eastman received exchange rights for volumes Westlake declined.

The agreement was governed by Delaware law. That mattered. Unlike Texas law, Delaware implies a covenant of good faith and fair dealing into every contract, and the court recognized that the covenant constrained the parties from acting arbitrarily or unreasonably in a way that would deprive the other side of the benefit of the bargain.

But the covenant did not override the text. The court held the ESA unambiguous and construed the disputed nomination, purchase, and exchange provisions from the four corners of the agreement. It refused to add a December 31 deadline where the contract had not included one. It rejected readings that would treat spot sales as qualifying one-year third-party contracts. And it declined to extend free-exchange rights to tolled ethylene that the operative defined terms did not include.

The court also rejected Eastman's effort to use years of course-of-performance evidence—emails, nomination history, and operational practice—to expand the express terms of the ESA.  The negotiated words remained the governing source of obligation, irrespective of the parties’ historical performance.

Why it matters: Choice-of-law clauses are substantive terms, not boilerplate. Delaware or New York law may import doctrines that differ from what is recognized under Texas law. But those doctrines likely will not replace the contract the parties drafted.

2. Indemnity, exclusive-remedy, and survival clauses are enforced on their own clock

Plains Pipeline, L.P. v. Arrowhead Gulf Coast Holdings, LLC, 2026 Tex. Bus. 29 (11th Div. May 16, 2026).

Plains sought to recover costs incurred defending and resolving Louisiana erosion and infrastructure-maintenance claims tied to pipeline assets Arrowhead had purchased under a 2016 asset-purchase agreement. Plains framed the case as a straightforward breach-of-contract claim and argued that Arrowhead had assumed the relevant liabilities in perpetuity.

Arrowhead responded that it was a contractual indemnity case, and that the claim was governed by the agreement's indemnification article, including its exclusive-remedy and survival provisions. The court agreed. Reading the purchase agreement as a whole, the court held that Plains's remedy was channeled into the indemnity provisions and that those obligations had expired before Plains asserted the claims.

The court rejected Plains's "in perpetuity" theory because it would have rendered the negotiated indemnity and survival provisions meaningless. The agreement contained a broad assumption of liabilities, but it also contained a specific remedial structure, a survival period, and a written-notice requirement. The court enforced that structure.

Why it matters: Survival periods, exclusive-remedy clauses, and notice provisions are not administrative details. They can decide the case. Broad assumed-liabilities language will not necessarily create perpetual exposure when the same agreement contains a negotiated indemnity window and a mandatory claims process.

3. Defined terms are read in the tense the parties chose

Energy Founders Fund, LP v. Daskevich, 2026 Tex. Bus. 34 (11th Div. May 29, 2026).

This governance dispute turned on a single defined term: "Affiliate." Energy Founders Fund (EFF) invoked a drag-along provision in a company agreement to compel minority members to join a sale of EFF's interest to GW Allen, a special-purpose vehicle. The drag-along was valid only if the buyer was not an "Affiliate" of EFF.

The minority members argued that GW Allen was effectively EFF's affiliate because EFF had negotiated substantial post-closing governance rights. The court rejected that theory and granted partial summary judgment for EFF.

The agreement defined "Affiliate" through "control," and "control" required present possession of the power to direct management and policies. The court emphasized the present-tense language. Before closing, GW Allen was owned and controlled by an independent third party. EFF had no equity, voting rights, managerial power, or contractual right to direct GW Allen's affairs. Future rights that would spring into existence only after closing did not retroactively create present affiliate status.

Why it matters: Affiliate, control, change-of-control, and drag-along provisions should be drafted with timing in mind. "Is" is not "becomes." If future, contingent, rollover, or post-closing governance rights are intended to count, the agreement must say so.

Key Takeaways

1. Treat conditions precedent and deadlines as claim-dispositive. Notice, cure, survival, election, and invoice-dispute provisions should be strictly followed.
2. Audit choice-of-law clauses for substantive consequences. A Delaware or New York clause can import doctrines that Texas law would not supply. Those doctrines may matter, but they will not override clear text.
3. Draft definitions as if they will decide the case. "Affiliate," "control," "Excess Ethylene Quantities," and "assumed liabilities" are not background terms. They are often the battleground.
4. Do not rely on course of performance to fix imperfect drafting. Where the contract is unambiguous, years of informal practice, internal records, and "how we always did it" emails generally will not change the meaning.
5. Use formulas, not assumptions, for economic mechanics. Payout, back-in rights, credits, allocations, nominations, exchanges, and deficiency payments should be mechanical enough that a court can apply them without reconstructing business expectations.
6. Litigate the four corners early. In the Business Court, clean contract-construction issues are well suited for early summary judgment, targeted Rule 166(g) procedures, and motions to strike extrinsic evidence.