On August 7, 2026, the Supreme Court of Texas (SCOTX) accepted two certified questions from the US Court of Appeals for the Fifth Circuit; argument is set for December 2, 2026.

Certified Questions
1)    Under Texas contract interpretation principles, do the force majeure provisions of the North American Energy Standards Board form contract require the seller of natural gas who is not a gas producer to enter the spot market during a force majeure event if that seller had already been using the daily or spot market for part of its gas supply?

2)    If there is an obligation on those facts, how should “reasonable efforts” to provide gas from the spot market be defined?

When, as here, a federal court must decide a case based on state law, and the federal court is unsure how a state court would rule, the federal court can certify controlling questions to the state’s highest court for guidance.

The certified questions address force majeure clauses in the North American Energy Standards Board form contract. While important to the gas industry, the decision may provide guidance to courts interpreting force majeure clauses in all contracts and may assist those drafting contracts that contain these clauses.

Seller’s Supply Included the Spot Market
In this dispute, the seller had historically supplied most of the gas to the buyer with gas from its affiliates but supplied 29% with spot market purchases. In 2019, during Winter Storm Uri, the seller declared force majeure, claiming its supply had become unavailable. The buyer claimed the seller could not claim force majeure because the seller did not attempt to satisfy its obligations with spot market gas purchases, which the seller could have done although at dramatically higher prices during the storm.

To see the 5th Circuit’s opinion, which certified the questions and provided additional background 23-20567-CV1.pdf