5
PLAYBOOK TEMPLATES
Real Estate Purchase Agreement
A Real Estate Purchase Agreement governs the sale and transfer of property ownership between buyer and seller. This playbook covers due diligence, contingencies, and closing mechanics.
Liability and Indemnification
Negotiation strategy
Ensure the liability cap is clearly defined and reasonable, typically not exceeding the total amount paid under the agreement in the past 12 months. Confirm mutual indemnification for third-party claims, specifying exclusions for the indemnified party's negligence or willful misconduct.
Negotiate for a liability cap that reflects the actual risk exposure and ensure indemnification obligations are mutual. Seek to limit indemnification to direct losses and exclude indirect, incidental, or consequential damages.
Essential elements
1
Liability Cap
Defines maximum financial exposure.
2
Indemnification Scope
Outlines indemnity obligations.
3
Negligence Carve-Out
Excludes liability for negligence.
Action framework
ACCEPT
Propose edits when liability caps are absent or unreasonably high.
EDIT
Reject clauses that lack mutual indemnification or carve-outs for negligence.
ADD
Add language for specific indemnities in high-risk scenarios.
PRO TIP
Always tailor indemnity clauses to the specific risks associated with the property.
Real-world examples
FAVORABLE
Balanced Indemnity Clause
"Each party shall indemnify and hold the other party harmless from any third-party claims, demands, or actions arising from the use or condition of the property, except to the extent such claims arise from the negligence or willful misconduct of the Indemnified Party."
NEUTRAL
Standard Liability Cap
"The total liability of either party for any and all claims arising out of or related to this Agreement shall not exceed the total amount paid under this Agreement during the twelve (12) months preceding the event giving rise to such liability."
UNFAVORABLE
Uncapped Liability
"Neither party shall have any cap on liability for any claims arising out of or related to this Agreement."
Alternative scenarios & positions
High-Risk Properties
For properties classified as high-risk due to location or usage, consider increasing liability caps or adding specific indemnities.
Shared Facilities
In shared facilities, ensure indemnification covers common areas and shared utilities to prevent disputes.
Environmental Concerns
For properties with potential environmental issues, include specific indemnities for contamination or regulatory compliance.
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