5
PLAYBOOK TEMPLATES
Construction Build-Out Agreement
A Construction & Build-Out Agreement governs property improvements or fit-outs between owner and contractor. This playbook discusses scheduling, change order processes, and liability for defects.
Compliance and Permits
Negotiation strategy
Ensure that all necessary permits are obtained and maintained. Negotiate indemnity clauses to protect against violations and address changes in law proactively.
Require the tenant to assume responsibility for compliance and permits. Include indemnity provisions to safeguard against potential legal issues.
Essential elements
1
Permit Obligations
Responsibility for obtaining permits.
2
Compliance Indemnity
Protection against legal violations.
3
Changes in Law
Process for legal updates.
Action framework
ACCEPT
Propose edits if responsibilities are unclear or indemnities are missing.
EDIT
Reject if the clause fails to allocate compliance responsibilities.
ADD
Add language for changes in law if absent.
PRO TIP
Always include a process for addressing changes in law to avoid future disputes.
Real-world examples
FAVORABLE
Preferred Clause
"The Tenant shall obtain and maintain all necessary permits and comply with all applicable laws and regulations. The Tenant shall indemnify the Landlord against any violations. In the event of changes in law, the parties shall negotiate in good faith to address compliance."
NEUTRAL
Fallback Clause
"Both parties shall jointly ensure compliance with applicable laws and obtain necessary permits, sharing costs equally."
UNFAVORABLE
Vague Compliance Clause
"The parties will comply with applicable laws as necessary."
Alternative scenarios & positions
High-Risk Projects
In high-risk projects, ensure detailed compliance plans and indemnities are in place to mitigate potential legal issues.
Shared Facilities
For shared facilities, clearly define which party is responsible for specific compliance tasks to avoid disputes.
International Transactions
In international transactions, consider additional compliance requirements and permits specific to each jurisdiction.
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