Extent of lien - Dispute as to amount due - Notice - Buyer in ordinary course of business
N.D. Cent. Code § 35-37-02
in effect35-37-02. Extent of lien - Dispute as to amount due - Notice - Buyer in ordinary course
of business.
1. To secure payment from the sale of oil or gas, an interest owner, subject to section
35-37-04, has a continuing security interest in and a lien on the oil or gas severed, or
the proceeds of sale if the oil or gas has been sold, to the extent of the interest owner's
interest until the purchase price has been paid to the interest owner.
2. In the event of a bona fide dispute as to the amount due the interest owner, the
security interest and the lien do not accrue if the person holding the proceeds upon
which a lien is claimed tenders to the interest owner the amount which that person in
good faith believes to be due and payable.
3. A security interest or lien claimed pursuant to this chapter is not effective against an
interest owner, operator, first purchaser, or purchaser until a copy of the notice of lien
required to be filed under section 35-37-04 has been delivered to the interest owner,
operator, first purchaser, or purchaser by registered mail.
4. Notwithstanding any other provision in this chapter to the contrary, a person who pays
the purchase price for oil or gas severed from a well to the interest owner with whom
that person has a contract regarding purchases from the well or to one who is
authorized to receive payment on behalf of or for the interest owner is deemed a buyer
in the ordinary course of business and takes the oil or gas free of the security interest
and lien granted to the interest owner by this chapter, and the first purchaser or
purchaser who makes the payment and all its property is free from and not subject to
the security interest or lien granted to the interest owner by this chapter.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://ndlegis.gov/cencode/t35c37.pdf#nameddest=35-37-02Fetched: 10/16/2026