SOLUTION: So Confused!! I'm much older than the average student you normally assist; however, I have recently received notice via contract form from a oil company who are interested in setti

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Question 39687: So Confused!! I'm much older than the average student you normally assist; however, I have recently received notice via contract form from a oil company who are interested in setting and drilling on some property which has been in my family for generations. They are offering me 3/16 of the royalties from oil or gas saved at the well and they have also offered the same amount to seven of my family members, each of us have received contracts indicating the offer of 3/16 and I'm not sure how much this actually is on a per dollar scale?, I believe 3/16 of a dollar or 100 is approximately 19 cents on the dollar which would make it impossible to pay eight persons 19 cents on the dollar and the oil company make money. It may be a percentage; however, a percentage is not indicated on the contract just 3/16 and a lawyer indicated the 3/16 is a fair offer and will be paid to me monthly. Sorry for the long explanation.. can you please determine what they mean by 3/16 and or how much they are actually offering each of us on a per 1.00 scale.
Thank You, Lucille
Answer by fractalier(1829) About Me  (Show Source):
You can put this solution on YOUR website!
Well, on the surface it appears an impossibility to pay seven people 3/16 of anything, since seven times 3/16 = 21/16 and over 100%.
Yes, 3/16 is 18.75% or almost 19 cents for every dollar.
I have a graphics business where I license my artwork for usually 10% royalty. When I use an agent to get me work like that, the agent gets 40-50% of that 10%. Don't know if that helps, just thought I would add it.
In matters of business contracts, especially in those resulting in large sums of money, find yourself an attorney, a GOOD one, who will handle these affairs and be in your corner if someone tries to screw you. When it comes to money, almost everyone is out there to screw you so be forewarned.
Good luck.