Fact Pattern 18-1 Prudence Wants to Develop a Shopping Center in Her Town

question 60

Multiple Choice

Fact Pattern 18-1
Prudence wants to develop a shopping center in her town. She is very interested in developing the center at the location of an old dump. She can purchase the property cheaply, and it is near one of the fastest growing areas of the city. She is concerned, however, about being held liable for all cleanup costs. She has heard about federal and state funds that may be available; but she is concerned that if she purchases the property knowing that contamination is likely there, she will not be eligible to participate in government assistance programs for cleanup. She decides to discuss her problem with Bruce, a law student studying environmental law.
-Refer to fact pattern 18-1. What should Bruce advise Prudence regarding her plans?

• A) That she should forget the project because she would be ineligible for any cleanup assistance and, as owner, would be individually liable for the entire project.
• B) That she should buy the property without any investigation and deny knowledge of contamination if later questioned because under federal law she can only be held liable if she had full and informed knowledge of contaminants when she made the purchase.
• C) That she should incorporate because while an individual is liable for the entire costs of cleanup, a corporation is not.
• D) That by taking appropriate steps to become a bona fide prospective purchaser, she can avoid liability for legacy contamination.

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Definitions:

Binding Decision

A final and enforceable ruling or agreement that must be followed by the parties involved.

Mandatory Arbitration Clause

A provision in a contract requiring the parties to resolve disputes through arbitration, rather than through litigation.

Waived

Means voluntarily giving up a known right, claim, or privilege.

Right to Sue

The legal authority granted to an individual or entity to bring a lawsuit against another party.