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 to make them
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
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,
Environmental Requirements: Traditionally the term used is “Environmental Law,” but “Requirements” is more accurate as the definition goes beyond statutes and regulations.
A major problem with definitions of environmental terms in commercial and real estate transaction documents is that they become overly inclusive, confusing, and unworkable. A definition of “hazardous materials” which includes virtually every substance known to man in any amount at any concentration, will be impossible to satisfy
A. Representations: a statement of fact to induce another party to enter into a contract.
B. Warranty: a promise that the statement is true; intended to relieve the promise (Buyer) from having to determine if the facts are true.
* Practice Tip: Representations and warranties are not a substitute for including,
