Grubstake Contract Law and Legal Definition

A contract between two parties in which one party provides the grubstake is known as a grubstake contract. In a grubstake contact on party provides the grubstake such as money and supplies and the other party prospects for and locates mines on public land. Each party acquires an interest in the mine according the terms of the contract. Grubstake contracts are used chiefly in the western United States. In some states, such as Alaska, a request for grubstake money is considered the offer of a security and must be registered.