Major Damage Clause Samples
The Major Damage clause defines the procedures and responsibilities that apply when significant harm or destruction occurs to property covered by an agreement, such as a leased building or insured asset. Typically, this clause outlines what constitutes 'major' damage, the steps parties must take to assess the extent of the damage, and the options available, such as repair, replacement, or termination of the agreement. Its core function is to provide a clear framework for handling severe property damage, ensuring both parties understand their rights and obligations, and reducing uncertainty in the aftermath of a major incident.
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Major Damage. In the event of Major Damage to a Property prior to the Closing Date, then the applicable Seller shall have no obligation to repair such Major Damage and shall notify Purchaser in writing of such damage or destruction (the “Damage Notice”). Within ten (10) days after Purchaser’s receipt of the Damage Notice, Purchaser may elect at its option to give a Termination Notice for the damaged Property to Seller’s Representative. If Purchaser does not elect to terminate this Agreement with respect to the damaged Property, this transaction shall be closed in accordance with the terms of this Agreement either, at the election of the applicable Seller, (a) for the full Purchase Price for the damaged Property notwithstanding any such damage or destruction, and Purchaser shall, at Closing, execute and deliver an assignment and assumption (in a form reasonably required by the applicable Seller) of such Seller’ rights and obligations with respect to the insurance claim and related to such casualty, and thereafter Purchaser shall receive all remaining insurance proceeds pertaining to such claim (plus a credit against the applicable Purchase Price at Closing in the amount of any deductible payable by the applicable Seller in connection therewith and not spent by such Seller for demolition, site cleaning, restoration or other repairs); or (b) Purchaser shall receive a credit against the Base Purchase Price for the damaged Property for the full replacement costs of repair to the subject Property, plus, to the extent covered by such Seller’s insurance policy, any costs required pursuant to local code or zoning requirements, as determined by an independent third party reasonably acceptable to such Seller and Purchaser. In the event a Seller elects to assign such Seller's rights and obligations with respect to the insurance claim and related casualty to Purchaser as provided above, and if an AIMCO employee is the adjuster for the claim related thereto, Sellers covenant and agree that the adjuster shall act in accordance with standard insurance industry protocols in processing such claim (including, without limitation, the time taken to process such claim).
Major Damage. In the event that the Property is damaged or destroyed by fire or other casualty prior to Risk of Loss Transfer, and the cost for demolition, site cleaning, restoration, replacement, or other repairs (collectively, the "Repairs") is more than $700,000.00 (a "Major Damage"), then Seller shall have no obligation to make such Repairs, and shall notify Purchaser in writing of such damage or destruction (the "Damage Notice"). If there is a Major Damage, then Purchaser may elect, by delivering written notice to Seller on or before the earlier of (x) Closing and (y) the date which is ten (10) days after Purchaser's receipt of the Damage Notice, to terminate this Contract, in which event the Deposit shall be returned to Purchaser. In the event Purchaser fails to timely terminate this Contract pursuant to this Section 11.1, this transaction shall be closed in accordance with Section 11.3 below.
Major Damage. In the event of a “major” loss or damage, either Seller or Purchaser may terminate this Agreement with respect to such damaged or condemned Property only by delivering written notice to the other party, in which event the ▇▇▇▇▇▇▇ Money shall be returned to Purchaser. If neither Seller nor Purchaser elects to terminate this Agreement with respect to such damaged or condemned Property within ten (10) days after Seller sends Purchaser written notice of the occurrence of major loss or damage, then Seller and Purchaser shall be deemed to have elected to proceed with Closing, in which event Seller shall, at Seller’s option, either (a) perform any necessary repairs, or (b) assign to Purchaser all of Seller’s right, title and interest to any claims and proceeds Seller may have with respect to any casualty insurance policies or condemnation awards relating to the premises in question. In the event that Seller elects to perform repairs upon such Property, Seller shall use reasonable efforts to complete such repairs promptly and the date of Closing shall be extended a reasonable time in order to allow for the completion of such repairs. If Seller elects to assign a casualty claim to Purchaser, the Purchase Price shall be reduced by an amount equal to the amount of any deductible or self-insured amount. Upon Closing, full risk of loss with respect to the Property shall pass to Purchaser.
Major Damage. In the event of a “major” loss or damage, either Seller or Purchaser may terminate this Agreement by written notice to the other party, in which event the ▇▇▇▇▇▇▇ Money shall be returned to Purchaser. If neither Seller nor Purchaser elects to terminate this Agreement within ten (10) days after Seller sends Purchaser written notice of the occurrence of major loss or damage, then Seller and Purchaser shall be deemed to have elected to proceed with Closing, in which event Seller shall, at Seller’s option, either (a) perform any necessary repairs, or (b) assign to Purchaser all of Seller’s right, title and interest to any claims and proceeds Seller may have with respect to any casualty insurance policies or condemnation awards relating to the premises in question. In the event that Seller elects to perform repairs upon the Property, Seller shall use reasonable efforts to complete such repairs promptly and the date of Closing shall be extended a reasonable time in order to allow for the completion of such repairs. Upon Closing, full risk of loss with respect to the Property shall pass to Purchaser. For purposes of Sections 7.1 and 7.2, “major” loss or damage refers to the following: (i) loss or damage to the Property or any portion thereof such that the cost of repairing or restoring the premises in question to a condition substantially identical to that of the premises in question prior to the event of damage would be, in the certified opinion of a mutually acceptable architect, equal to or greater than ten percent (10%) of the Purchase Price; and (ii) any loss due to a condemnation which permanently and materially impairs the current use of the Property.
Major Damage. In the event that the Property is damaged or destroyed by fire or other casualty prior to Closing, and the cost for demolition, site cleaning, restoration, replacement, or other repairs (collectively, the "Repairs") is more than $250,000, then Seller shall have no obligation to make such Repairs, and shall notify Purchaser in writing of such damage or destruction (the "Damage Notice"). Within 10 days after Purchaser's receipt of the Damage Notice, Purchaser may elect at its option to terminate this Contract by delivering written notice to Seller in which event the Deposit shall be refunded to Purchaser. In the event Purchaser fails to terminate this Contract within the foregoing 10-day period, this transaction shall be closed in accordance with Section 11.3 below.
Major Damage. In the event of a "major" loss or damage, Purchaser may terminate this Agreement by written notice to Seller, in which event the Earn▇▇▇ ▇▇▇ey shall be returned to Purchaser. If Purchaser does not elect to terminate this Agreement within ten (10) business days after Seller sends Purchaser written notice of the occurrence of major loss or damage, then Seller and Purchaser shall be deemed to have elected to proceed with Closing, in which event Seller shall, at Seller's option, either (a) perform any necessary repairs, or (b) assign to Purchaser all of Seller's right, title and interest to any claims and proceeds Seller may have with respect to any casualty insurance policies or condemnation awards relating to the premises in question. In the event that Seller elects to perform repairs upon the Property, Seller shall use reasonable efforts to complete such repairs promptly and the date of Closing shall be extended a reasonable time in order to allow for the completion of such repairs. If Seller elects to assign a casualty claim to Purchaser, the Purchase Price shall be reduced by an amount equal to the deductible amount under Seller's insurance policy. Upon Closing, full risk of loss with respect to the Property shall pass to Purchaser.
Major Damage. If, prior to Closing, the Property, or any portion thereof, is damaged by fire, or any other cause of whatsoever nature, Seller will promptly give Purchaser written notice of such damage. If the cost for repairing such damage, in the reasonable judgment of Purchaser, exceeds five hundred thousand Dollars ($500,000.00), Purchaser will have the option, exercisable by written notice delivered to Seller within fifteen (15) days of Seller's notice of damage to Purchaser, either (i) to require Seller to convey the Property to Purchaser, in its damaged condition and to assign to Purchaser all of Seller's right, title and interest in and to any claims Seller may have under the property insurance policies covering the Property and pay any and all deductibles of such policies or any uninsured portion of the cost of repairing the damage to Purchaser, in which event Seller will have no further liability or obligation to repair or replace the Property, or (ii) to terminate this Contract. If Purchaser elects to terminate this Contract, the ▇▇▇▇▇▇▇ Money shall be returned to Purchaser, and thereafter neither party hereto will have any further duties or obligations hereunder except under provisions which survive termination by their terms.
Major Damage. If the cost for repairing such damage or adverse physical change is greater than Five Million Dollars ($5,000,000) (as determined by Seller’s independent insurer, in the case of insured damage), then Purchaser shall have the option, exercisable by written notice delivered to Seller and Escrow Agent within ten (10) Business Days after Seller’s notice of damage to Purchaser, either (i) to receive a credit for the amount of the deductible plus all insurance proceeds received by Seller as a result of such loss, or an assignment of Seller’s rights to such insurance proceeds (or, in the case of an uninsured loss, a credit for the reasonably estimated amount of the loss), and this Agreement shall continue in full force and effect with no reduction in the Purchase Price, and Seller shall have no further liability or obligation to repair such damage, material adverse change, or to replace the Property; or (ii) to terminate this Agreement. If Purchaser elects to terminate this Agreement, the Deposit shall be promptly returned to Purchaser, and thereafter neither party will have any further rights or obligations hereunder, except for any obligations that expressly survive termination. If Purchaser fails to notify Seller within such ten (10) Business Day period of Purchaser’s intention to terminate this Agreement, then Purchaser shall be deemed to have elected option (i), and Purchaser and Seller shall proceed to Closing in accordance with the terms and conditions of this Agreement.
Major Damage. In the event of a “major” loss or damage, Purchaser may terminate this Agreement by written notice to Seller, in which event the ▇▇▇▇▇▇▇ Money previously paid by Purchaser, shall be returned to Purchaser (and if Seller elected to deliver the Letter of Credit, the Escrow Agent shall return the Letter of Credit to Purchaser, marked “Canceled”). If Purchaser does not elect to terminate this Agreement within ten (10) Business Days after Seller sends Purchaser written notice of the occurrence of major loss or damage, then Purchaser shall be deemed to have elected to proceed with Closing, in which event Seller shall assign to Purchaser (i) all of Seller’s right, title and interest in and to any claims and proceeds Seller may have with respect to any casualty insurance policies and condemnation awards relating to the premises in question, plus (ii) the proceeds of any insurance policies paid to Seller with respect thereto and Seller’s portion of any condemnation awards paid to Seller with respect thereto, plus (iii) the amount of the deductible (in no event to exceed the amount of the loss), which deductible amount shall be credited against the Purchase Price at Closing. Upon Closing, full risk of loss with respect to the Property shall pass to Purchaser.
Major Damage. In the event of a “major” loss or damage to a Property and provided such loss or damage was not caused by Purchaser or Purchaser's Representatives, Purchaser may terminate this Agreement by written notice to Sellers, in which event the ▇▇▇▇▇▇▇ Money shall be returned to Purchaser, less the Independent Consideration. If Purchaser does not elect to terminate this Agreement within ten (10) days after Sellers send Purchaser written notice of the occurrence of major loss or damage (and, if the Closing Date is within such 10-day period, then Closing shall be extended to the next business day following the end of said 10-day period), then Purchaser shall be deemed to have elected to proceed with Closing. In the event prior to Closing the applicable Seller shall not have fully repaired or restored such Property to the same condition as existed immediately prior to such loss or damage (without any obligation to do so), then such Seller shall assign to Purchaser all of such Seller’s right, title and interest to any claims and proceeds such Seller may have with respect to any casualty insurance policies or condemnation awards relating to the Property in question. In the event that such Seller elects, in its sole discretion, to perform repairs upon the Property, such Seller shall use reasonable efforts to complete such repairs promptly and the date of Closing shall be extended a reasonable time in order to allow for the completion of such repairs, not to exceed twenty (20) days. In connection with the applicable Seller’s assignment of a casualty claim to Purchaser, the Purchase Price shall be reduced (i.e. Purchaser shall receive a credit against the Purchase Price at Closing) by an amount equal to the deductible amount under such Seller’s insurance policy. Upon Closing, full risk of loss with respect to the Properties shall pass to Purchaser.