EnvironmentalIntermediateDelaware Exam

What is 'environmental indemnification' in a Delaware commercial real estate purchase agreement?

AThe seller's agreement to pay all future property taxes
BA contractual provision in which the seller agrees to indemnify (hold harmless) the buyer from liability for pre-existing environmental contamination on the propertyCorrect
CThe buyer's agreement to restore any environmental damage caused during the due diligence period
DInsurance coverage protecting the buyer from environmental liability

Why A contractual provision in which the seller agrees to indemnify (hold harmless) the buyer from liability for pre-existing environmental contamination on the property Is Correct

Answer B: A contractual provision in which the seller agrees to indemnify (hold harmless) the buyer from liability for pre-existing environmental contamination on the property

Environmental indemnification provisions in commercial purchase agreements allocate environmental liability between buyer and seller. The seller may indemnify the buyer for pre-existing contamination, or a buyer may agree to take the property as-is with no seller indemnification.

Exam Tip: Environmental

Environmental questions test knowledge of hazards like asbestos, lead-based paint, radon, and mold. Know the disclosure requirements and when a professional inspection is required. CERCLA liability is strict, joint, and several.

Key Environmental Terms in This Question

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