Billionaire real estate mogul Glenn Rhee owns tow large parcels of land in Alexa

Question

Billionaire real estate mogul Glenn Rhee owns tow large parcels of land in Alexandria, VA: Greenacre and Blueacre. Greenacre is to the north and Blueacre is directly south. Both parcels of land are surrounded by protected conservation land. A state highway runs perpendicular to the properties.

Six years ago, Mr Rhee decided to leave the real estate business and open a chain of pizza restaurants called ”Maggies slice”.

Greenacre was quickly purchased by Walker Treatment Inc., which is a hazardous materials treatment center. For the past six years Walker Treatment Inc. has crossed over Blueacre in order to reach the highway that runs perpendicular to the land. Greenacre does not have its own access to the highway. Walked Treatment Inc. uses the highway to pick up hazardous waste from all over the country and processes it at its treatment center. Occasionally, customers will transport their hazardous waste to Walker Treatment and cross over Blueacre.

Rick and Michoone grimes have decided to purchase and develop Blue acre.They have plans to build a large shopping mall and high-end condos near the highway to attract commuters. They are also going to construct a large sound barrier wall to help improve the ascetics of the mall and condos. Walker Treatment Inc. has now come to the Grimes asking for easement to transport hazardous materials over Blueacre in order to reach their facility on Greenacre. After consulting their attorney, Rick and Michonne realize that Walker Treatment Inc is entitled to an “easement by necessity,” because Greenacre is landlocked and has no access to the public highway. The Grime’s have decided to grant the easement; however, they want to include clause in agreement.

Please answer all of the following:

1.What protections should the Grimes include in the indemnity clause? Remember to consider various risks ie: overturned trucks, potholes in the road etc.

2.What damages and losses are covered should be covered?

3.Is there a cap on liability? What is the amount?

4. What obligations do the Grimes have in maintaining the road? Who is responsible for snow removal?

Explanation / Answer

After reading the case study, let us solve each one of the questions one by one:

Question No. 1.What protections should the Grimes include in the indemnity clause? Remember to consider various risks ie: overturned trucks, potholes in the road etc.

Answer: Indemnification required when a party assumes a risk while getting into an agreement with the another party. In the given situation there is a risk of potholes when Walker Treatment Inc. shall use its loaded trucks to pass from Blueacre for transporting hazardous materials to treatment center. Therefore Grimes should include protection or maintenance of the roads in the indemnity clause so that the financial risk can be mitigated while signing the agreement.

Question No. 2.What damages and losses are covered should be covered?

Answer: In case of property losses due to use of property by Walker Treatment Inc. occurs due to accidental spillage of hazardous material while transportation or potholes in the road etc. then these losses should be covered in the agreement. It is obvious that there shall be always a maintenance requirement to upkeep the property and roads to the required level so that it is important that these clauses should be included in the agreement.

Question No. 3.Is there a cap on liability? What is the amount?

Answer: There may not be a cap on liability as per the losses which may occur in future. Since the loss is not defined in actual as of now so that the amount can not be fixed at the moment. However an estimate cost required to upkeep the roads can be mentioned and to be considered with the both party in agreement and in mutual consent.

Question No. 4. What obligations do the Grimes have in maintaining the road? Who is responsible for snow removal?

Answer: Being an owner of the property and roads Grimes have the primary responsibility in maintaining the road. They are also responsible for removal of snow since it comes in the up-keeping of the roads. For ease of the commuters Grimes have to look after the maintenance of the roads, however the financial aid is already being recovered from the parties using these roads as Grimes already included these protections in the indemnity clause while signing the agreement with the another party considering the maintenance risks.

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