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The Environmental Consultants' Opinion Letter: A Step Beyond an Environmental Audit

May 1990

Citation: ELR 10184

Author: Patrick Del Duca

Buyers of any real property, a facility, or a company that owns real property or facilities should understand their potential exposure to environmental liability as a result of such acquisitions before closing any deal. Buyers, sellers, and lenders can avoid onerous demands and outright refusals to undertake a transaction if sufficient information is available to manage, if not eliminate, uncertainties about environmental liability. Quantifying the potential risks of environmental liability serves each of the parties by providing them with the facts necessary to negotiate risk allocation.

An environmental audit,1 prepared by environmental consultants, is the foundation for any negotiation and needs to be intelligible and complete. While lawyers investigate environmental liabilities by inquiring into litigation, administrative investigations, indemnification agreements, and other matters, the parties to a transaction turn to environmental consultants to investigate the physical conditions and regulatory postures that help determine the nature and amount of environmental liability.2 This Article focuses on the environmental consultants' opinion letter, which is increasingly used to focus the environmental consultants' work and to clarify its significance.

Patrick Del Duca, Ph.D., European University Institute; J.D., Harvard Law School; D.E.A., Universite de Lyon; dott. di giur., Universita di Bologna. Dr. Del Duca practices law with O'Melveny & Meyers in Los Angeles.

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