This clause makes one party responsible for cleaning up or paying for environmental damage (like soil contamination, asbestos, or underground fuel tanks) that was caused before the contract was signed. Environmental liability can be extremely expensive—remediation costs can reach hundreds of thousands of pounds—and under UK and US law, the current property owner is often legally responsible for cleanup even if they didn't cause the damage. An indemnity shifts that financial burden to whoever caused the problem, but only if the clause is carefully written.
If you are the buyer, push for the seller to get an environmental survey done before you buy and to take responsibility for any problems found. If you are the seller, try to limit your indemnity to only problems you actually knew about or caused, and set a time limit (e.g., "indemnity expires after 5 years") so you are not liable forever. ---
Frequently Asked Questions
What does this clause mean in simple terms?
This clause makes one party responsible for cleaning up or paying for environmental damage (like soil contamination, asbestos, or underground fuel tanks) that was caused before the contract was signed.
Why should I care about this clause?
Environmental liability can be extremely expensive—remediation costs can reach hundreds of thousands of pounds—and under UK and US law, the current property owner is often legally responsible for cleanup even if they didn't cause the damage.
What are my options?
An indemnity shifts that financial burden to whoever caused the problem, but only if the clause is carefully written.