The Importance of Environmental Conditions in Business Law: Analyzing Sale Proposals
Added on 2023-04-26
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BUSINESS LAW
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Importance of knowing environmental condition
The given sale proposal needs to be analysed in the wake of the given scenario. It is
known that the land under sale has various facilities belonging to the International Paint
Company. The nature of the paint business is such that a significant amount of toxic wastes
are generated which need to be disposed off in accordance with the applicable environmental
laws. This is necessary so as to avoid adverse consequences on the surrounding environment.
As a result, such companies tend to incur significant clean up costs at periodic intervals
related to disposal of toxic wastes (Eccleston 65-67).
In the light of the above background, it is imperative that the buyer (U.S. Parts) must
be aware of the environmental condition of the land as it is highly likely there may be
presence of some toxic wastes which are by-products of paint manufacturing. If this is indeed
the case, then the same would need to be cleaned by the new buyer through the services of a
certified waste disposal agency. Incremental costs would be incurred in this cleaning
operation and the same needs to be adjusted in the price. This is essential so that this liability
is not borne by the new buyer without International Paint Company paying the price for the
same.
Also, there is a possibility where the paint company may not have disposed the toxic
waste generated in the requisite manner owing to which it is possible that the nearby
environmental resources (such as air, land & water) may have been polluted and would have
adversely impacted the local communities that may be residing in the vicinity of the land. In
this case, the new owner would not only would have to incur the necessary clean up costs in
order to control further damage from being caused but would also have goodwill loss within
the community (Murthy 134-137). This would potentially lead to a higher cost of business
and the same needs to be adjusted in the price paid for the acquisition of the land. Further, it
The given sale proposal needs to be analysed in the wake of the given scenario. It is
known that the land under sale has various facilities belonging to the International Paint
Company. The nature of the paint business is such that a significant amount of toxic wastes
are generated which need to be disposed off in accordance with the applicable environmental
laws. This is necessary so as to avoid adverse consequences on the surrounding environment.
As a result, such companies tend to incur significant clean up costs at periodic intervals
related to disposal of toxic wastes (Eccleston 65-67).
In the light of the above background, it is imperative that the buyer (U.S. Parts) must
be aware of the environmental condition of the land as it is highly likely there may be
presence of some toxic wastes which are by-products of paint manufacturing. If this is indeed
the case, then the same would need to be cleaned by the new buyer through the services of a
certified waste disposal agency. Incremental costs would be incurred in this cleaning
operation and the same needs to be adjusted in the price. This is essential so that this liability
is not borne by the new buyer without International Paint Company paying the price for the
same.
Also, there is a possibility where the paint company may not have disposed the toxic
waste generated in the requisite manner owing to which it is possible that the nearby
environmental resources (such as air, land & water) may have been polluted and would have
adversely impacted the local communities that may be residing in the vicinity of the land. In
this case, the new owner would not only would have to incur the necessary clean up costs in
order to control further damage from being caused but would also have goodwill loss within
the community (Murthy 134-137). This would potentially lead to a higher cost of business
and the same needs to be adjusted in the price paid for the acquisition of the land. Further, it
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