Legal Definitions - marketing covenant

A marketing covenant is a promise made by a lessee in a mineral lease to sell the production from the lease within a reasonable time and at a reasonable price. This promise is implied and is part of the agreement between the lessor and the lessee.

For example, if a company leases a piece of land for oil and gas exploration, they are expected to sell the oil and gas they extract from the land within a reasonable time and at a fair price. If they fail to do so, they may be in breach of the marketing covenant.

The marketing covenant is important because it ensures that the lessor receives a fair share of the profits from the production of oil and gas on their land. It also protects the lessee from being forced to sell their production at an unreasonably low price.