Indemnification clause in seller’s addendum? - Posted by WadeM (GA)
Posted by WadeM (GA) on July 10, 2002 at 07:26:17:
My wife and I are in the process of negotiating a contract on a house for our personal residence that is currently corporate owned (previous owner was transferred and the house is vacant).
We were able to negotiate a good deal on price/terms and have verbally committed to the purchase contract (we?re supposed to sign the contract tonight 7/10), but I?m concerned over the language in the addendum to the contract that the corporation is requiring. The corporation has indicated that they are not willing to negotiate the language in the addendum.
The contract includes the following indemnification clause:
Buyer agrees to release, indemnify and hold harmless Seller, previous owners and their respective agents, servants, employees, directors and assigns (?Indemnified Parties?) from any and all claims, losses, damages, costs or expenses (including attorney?s fees and court costs) which the Indemnified Parties shall incur based upon (1) any defects in the Property, whether obvious or latent, known or unknown, easily discoverable or hidden, and (2) the information contained in or that should have been contained in the tests, inspections and disclosure statements set forth above.
The house looks in great shape and is only in need of minor cosmetic improvements (mostly paint and landscaping). The seller has conducted an inspection and is in the process of addressing the items raised by the inspection. In addition, we plan on having our own inspection as well.
My concern is that when we sell the house (probably in 5-7 years) that if the future buyer has some sort of problem with the house and decides to sue the previous owners (including the current corporate owner) is that we?ve agreed to defend the corporation in court. The corporation is a Fortune 500 corporation with deep pockets, so if there was a problem it could be very expensive to resolve.
The only issues that I can think of that could result in a ?major? law suite are major structural damage or some sort of environmental problem with the house. I guess I?m trying to figure out if I?m just being a nervous Nellie or if I should be really concerned? I was also wondering if it would be possible to purchase the house through a trust to limit the liability. Any thoughts?
Sorry for the lengthy explanation.