A Buyer's Catalogue of Prepurchase Precautions to Minimize CERCLA Liability in Commercial Real Estate Transactions
Because the cost and incidence of hazardous waste contamination are soaring and because the courts favor broad interpretations of CERCLA's liability provisions, counsel for prospective purchasers of commercial real estate must take certain prepurchase precautions to minimize potential CERCLA liability. This Comment pro- vides practical suggestions as to the aim and form of those precautions. In Part II, this Comment first examines the basic statutory framework and liability scheme of CERCLA. Part III discusses the common law principles of successor liability and their relation to CERCLA's liability mechanism. Finally, in Part IV, this Comment presents a variety of preventive law steps to lessen exposure to hazardous waste liability under CERCLA. Part IV begins by discussing buyers' and sellers' goals when negotiating a real estate purchase and the environmental risks that generally inhere in such a transaction. Part IV then demonstrates in successive subsections how to identify, evaluate, and allocate the risks of a specific purchase. This Comment provides examples of a condition, representations, and an indemnification clause, all of which may serve as protective devices in real estate contracts to allocate these risks. Part IV also considers how courts in four recent cases have responded to buyers' and sellers' attempts to enforce indemnity clauses to avoid CERCLA liability.
Geoffrey Douglas Patterson, A Buyer's Catalogue of Prepurchase Precautions to Minimize CERCLA Liability in Commercial Real Estate Transactions, 15 SEATTLE U. L. REV. 469 (1992).