Representations and Warranties

The condition of the assets or business is addressed in representations and warranties. With respect to TSCA, the seller usually makes two warranties that the business is operating in compliance with TSCA, except as otherwise set forth in a schedule, and that the seller is making available to the buyer all of the information that it has relating to TSCA compliance. These two warranties have two purposes. First, they help the parties understand the issues and manage the parties expectations. Second, they provide the basis for remedies in case they prove to be inaccurate. 

Memorandum from Robert E. Fabricant and Susan B. Hazen, Interpretive Statement on Change in Ownership of Real Property Contaminated With PCBs (Aug. 14,2003), available at http //www.epa.gov/epawaste/hazard/tsd/pcbs/pubs/distincom.pdf. 

The warranty that the business and assets are being operated in conformity with regulatory requirements is often entitled Compliance with Law, and potentially has three levels. First, is that the business as a whole is generally in compliance with law second is that the business is in compliance with environmental laws generally and third, that the business is in compliance with TSCA. While buyers want these warranties to survive for at least the five-year statute of limitations, sellers are unlikely to agree to such a long time period. 

A fairly typical Compliance with Law representation by the seller that states that it is in material compliance with environmental laws follows  

There are many variations on this clause that are informed by the specifics of the particular transaction. Both transactional lawyers and environmental lawyers should be involved in drafting a clause or clauses that reflect the circumstances in the involved transaction. 

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Environmental Contractual Liability Insurance (Representation and Warranty Insurance)... 

Limit of Liability/Disclaimer of Warranty While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties withrespect to theaccuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages. 

LIMIT OF LIABILITY/DISCLAIMER OF WARRANTY THE PUBLISHER AND AUTHOR HAVE USED THEIR BEST EFFORTS IN PREPARING THIS BOOK. THE PUBLISHER AND AUTHOR MAKE NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE ACCURACY OR COMPLETENESS OF THE CONTENTS OF THIS BOOK AND SPECIFICALLY DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THE DESCRIPTIONS CONTAINED IN THIS PARAGRAPH. NO WARRANTY MAY BE CREATED OR EXTENDED BY SALES REPRESENTATIVES OR WRITTEN SALES MATERIALS. THE ACCURACY AND COMPLETENESS OF THE INFORMATION PROVIDED HEREIN AND THE OPINIONS STATED HEREIN ARE NOT GUARANTEED OR WARRANTED TO PRODUCE ANY PARTICULAR RESULTS, AND THE ADVICE AND STRATEGIES CONTAINED HEREIN MAY NOT BE SUITABLE FOR EVERY INDIVIDUAL. NEITHER THE PUBLISHER NOR AUTHOR SHALL BE LIABLE FOR ANY LOSS OF PROFIT OR ANY OTHER COM-MERCIAL DAMAGES, INCLUDING BUT NOT LIMITED TO SPECIAL, INCIDENTAL, CONSEQUENTIAL, OR OTHER DAMAGES. ... 

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