In a sale or loan transaction the most important pre-closing covenant is that the borrower or seller will maintain the property in compliance with all environmental laws and will re-affirm accuracy of the representations and warranties as of the closing...
Year: 2008
“As Is” Clauses
Seldom is a knowledgeable buyer with experienced counsel willing to accept property "as is." Nonetheless, if that is the agreed term of the transaction, then special care must be taken to make that provision effective. It will be construed against the seller.1. If the...
No Asbestos, PCBs, USTs
It may be appropriate to add specific representations on individual contaminants or areas of concern to buyer or lender. In addition to those listed, formaldehyde and radon may be of concern to the buyer.1. The representation may be: "There is not now at, on, or in...
No Notices or Knowledge of Basis
1. Disclosure of outstanding notices or basis for notices is important to a continuing business: "Seller has not received written or oral notification that any of its current or past operations or a by-product thereof is related to or subject to any investigation by...
No Hazardous Substances
This most common of representations and warranties is most often abused. Buyer or tender may initially want a flat representation that there are not now and never have been any Hazardous Materials on the premises or any operations that generate, use, treat, store, or...
All Required Permits
Although the possession of and compliance with all necessary permits is important information for a buyer expecting to continue a business or a lender depending on the viability of a business, representations regarding permits do not necessarily cover potential...
No Violations / Compliance With Laws
A typical provision states: "Except as set forth in schedule x.x and except for violations which would not have a Material Adverse Effect, seller is not and has not been in violation of any Environmental Requirements. 1. Buyer or lender may want to add a...
Inducement / Best Knowledge
Typically the preamble for the representations and warranties will state that they are made to induce the buyer to purchase or the lender to make the loan contemplated. 1. Although buyer prefers seller's representations and warranties to be absolute, seller will want...
Material Adverse Effect and Adverse Environment Condition
Material Adverse Effect: In a sale of any ongoing business, one way to address the difficulty of being absolute in the representations and warranties when in fact the parties are not concerned about the de minimis presence of hazardous materials or damages, is to...
Term Definition: Environmental Damages
Environmental Damages: This definition is a convenient place to collect all the possible liabilities and damages arising from the presence of hazardous materials on the property in violation of, or requiring remediation under, any Environmental Requirements. It can...