Environmental
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 property✓ Correct
CThe buyer's agreement to restore any environmental damage caused during the due diligence period
DInsurance coverage protecting the buyer from environmental liability
Explanation
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. Indemnification is only as good as the seller's financial ability to pay — buyers should also consider environmental insurance.
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