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 date. (more…)

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. (more…)

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. (more…)

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 (more…)

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 dispose of Hazardous Materials.  Difficulties that immediately arise include (more…)

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 liabilities for remediation or third party damages. (more…)

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. (more…)

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 (more…)