PE7018 Law and Surveying: NDL Contamination Case Study Analysis

This report examines the legal responsibilities of Northumbria Developments Limited (NDL) concerning site contamination. The analysis focuses on the principle of caveat emptor, highlighting that the vendor provided false information. The report discusses the implications of information asymmetry, the importance of environmental due diligence, and the potential liabilities of NDL as the current owner. It references legal precedents and regulations, including the Department of Real Property pre-acquisition environmental site assessment and relevant sections of the 602 DM 2. The report emphasizes the need for appropriate inquiries, site assessments, and the mitigation of risks through contractual provisions. The case study highlights the importance of updated information and the vendor's duty to disclose information within a fair and reasonable reach of NDL prior to purchase. The report concludes that NDL is ultimately responsible for the contaminated site because construction is ongoing and they had planning documents to proceed with construction.

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Student Name;
Professor:
Course:
Date:
Problem Three

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An oversight in environmental concern
by NDL prior to purchasing the land.
NDL did not inspect land as was
required
Should ESL continue with
soil testing or soil testing
is now unnecessary?
No, soil testing is
not necessary
Yes, conduct soil testing
The time period has elapsed since
it is already 18 months. Hence,
NDL has already incurred losses
such as construction costs
Timely reasonable steps to
contain the contamination
and prevent further risks
related to the contaminants
Untimely steps to contain the
contaminants as the
construction is ongoing
Soil testing will give
room for further steps
such as the physical
state of the land,
appearance of
hazardous substances,
evidence of previous
contaminants. This will
lead to
recommendations and
summarizing any
potential problems
and contaminants
discovered on the soil
Proceed with soil
testing

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Proceed with soil
testing
Untimely steps to
contain the
contaminants as the
construction is ongoing
Legal actions
necessary for NDL Compel from other
contributors i.e. the
railway that had prior
existed in the other part
of the land to reimburse
NDL, based on the
theory of contribution
and partial equitable
indemnity, to reimburse
NDL for a fair share.
Since, railway had
substantially been
responsible for the
contamination
Establish the specific
causation
Since NDL has expended
more money in
purchasing the site and
is in the process of
construction, it should
conduct clean up
services and prevent any
cases of further
contamination
NDL should contract an
attorney to advise on
options to undertake
such as civil liability and
rescission of the
contract
Purchase environmental liability
insurance policy to protect NDL
on situations that might be too
risky in the future such as
damage coverage, interruption
coverage and environmental cost
coverage
The vendor was not
involved in silent fraud
by failing to disclose
environmental
contamination. The
knowledge was within a
fair and reasonable
reach of NDL and was
to be discovered prior
to purchase. Hence, the
duty of the vendor to
disclose is dispositive.

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In this scenario, caveat emptor (buyer beware) principle does not apply. The vendor-
provided false information to the buyer on the product that was being sold. Besides, land
contracts, lack of full disclosures lead to information asymmetry between the vendor and the
buyer in this case, NDL and the vendor. Hence, NDL was eligible for inspecting the land before
purchasing. NDL was supposed to acquire updated information before completing the contract to
understand the nature of the land contract that they were signing as this would protect them from
the vendor misleading information. (Darden).
Additionally, if the buyer(NDL) knew that the land was at risk of being contaminated, it
meant that they had two options to choose from. They were to walk away from purchasing the
land or another option was to assume the entire obligation of cleaning up the mess. An innocent
buyer who conducted inspection but never found, escapes liability but the current owners, NDL,
are completely liable of the contaminated site. Moreover, the buyer must complete all
appropriate inquiries i.e. the environmental due diligence by evaluating the environmental
condition of the property and ascertaining the like hood of future contamination. This should be
compiled before completing the contract.
The responsible party in this case is the client i.e. NDL. The client has to take full
responsibility owing to the fact that construction is ongoing and they also have planning
document to proceed with construction. After conducting the soil test which necessary to
ascertain the level of contamination that is likely to be encountered, NDL is liable for injuries as
stated by the statute. The department of real property pre-acquisition environmental site
assessment specifies that an environmental site assessment is conducted to ascertain environment
due diligence. The 602 DM 2, states the liability relating to acquisition of property and thus a
client should acquire property free from contamination unless directed by the courts. Site

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assessment should conform to the standards of the environmental site assessment that is in effect
at the particular time (Thomas and Wright).
Besides, the standards include appropriate inquiry regarding the previous ownership and
previous use of the property based on the customary and ideal commercial practice. Time factor
is also considered. In this case, time had elapsed since it had already taken 18 months. The 602
DM 2, section 6 B states that the pre-acquisition environmental inspection should be conducted
within 12 months before the date of purchase. However, when land is situated in adverse
geographical areas or in areas with hostile climate, the bureau director can consider the time
limit. The parties should use sale agreement to mitigate the risks through contractual provisions,
incorporate representations, and specify the environmental condition identified. If the cost of site
has been investigated and results to low cost of the project, the planning should be given a surety
to proceed. Finally, the knowledge of the vendor was within a fair and reasonable reach of NDL
and was to be discovered prior to purchase. Hence, the duty of the vendor to disclose is
dispositive.

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Works Cited
Darden, M Taylor, Ferrante, Eric. "Seller Beware: the Lack of a Buyer's Duty to Disclose." Ann.
Inst. on Min. L. 63 (2018): 363.
San, Tay Pek. "Contract II Assignment 2016/2017." (n.d.).
Thomas, Reginald William and Mark Wright. "Construction contract claims." (2016).