Material Casualty Clause Samples
The Material Casualty clause defines the rights and obligations of parties in the event that significant damage or destruction occurs to a property before the transaction is completed. Typically, this clause sets a threshold for what constitutes "material" damage—such as a percentage of the property's value or a specific dollar amount—and outlines the procedures to follow if such damage occurs, including the buyer's right to terminate the agreement or negotiate repairs. Its core practical function is to allocate risk between the parties and provide a clear process for addressing substantial property loss prior to closing, thereby preventing disputes and uncertainty.
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Material Casualty. If the amount of the repair restoration of the Property required by a Casualty equals or exceeds three percent (3%) of the Purchase Price (a “Material Casualty”) and such Material Casualty was not caused by Purchaser or Purchaser’s Inspectors, or their respective employees or agents, then Purchaser shall have the right to elect, by providing written notice to Seller within ten (10) days after Purchaser’s receipt of Seller’s written notice of such Material Casualty, to (a) terminate this Agreement, in which case the Deposit shall be refunded to Purchaser in accordance with Section 3.2.4, and the Parties shall have no further rights or obligations under this Agreement, except those which expressly survive such termination, or (b) proceed to Closing, without terminating this Agreement, in which case Seller shall (i) provide Purchaser with a credit against the Purchase Price in an amount equal to the lesser of: (A) the applicable insurance deductible, and (B) the reasonable estimated costs for the repair or restoration of the Property required by such Material Casualty, and (ii) transfer and assign to Purchaser all of Seller’s right, title and interest in and to all insurance proceeds (including, but not limited to, casualty, lost profits and business interruption proceeds) payable under Seller’s insurance policies maintained by Seller with respect to the Property and any Seller or its Affiliate-owned business(es) operating therein, except those proceeds allocable to lost profits and costs incurred by Seller for the period prior to the Closing. If Purchaser fails to provide written notice of its election to Seller within such time period, then Purchaser shall be deemed to have elected to proceed to Closing pursuant to clause (b) of the preceding sentence. If the Closing is scheduled to occur within Purchaser’s ten (10) day election period, the Closing Date shall be postponed until the date which is five (5) Business Days after the expiration of such ten (10) day election period.
Material Casualty. In the event that prior to the Close of Escrow the Real Property, or any material portion thereof, is destroyed or materially damaged, and no tenant is obligated by the terms of its Lease to repair such damage or destruction, Buyer shall have the right, exercisable by giving written notice to Seller within ten (10) days after receipt of written notice of such damage or destruction, either (i) to terminate this Agreement in which event the Deposit and all interest accrued thereon shall be promptly returned to Buyer, any other money or documents in Escrow shall be returned to the party depositing the same, and the provisions of Section 4.4 shall apply, or (ii) to accept the Real Property in its then condition and to proceed with the consummation of the transaction contemplated by this Agreement, with an abatement or reduction in the Purchase Price in the amount of the deductible for the applicable insurance coverage, and to receive an assignment of all of Seller’s rights to any insurance proceeds payable by reason of such damage or destruction, other than rental abatement/rent loss insurance attributable to the period of time prior to the Closing which shall be retained by or paid to Seller, and only if and to the extent such deductible is not any Tenant’s responsibility under any Lease. If Buyer fails to deliver written notice to Seller of Buyer’s election within the time period specified in this Section 13.1, Buyer shall be deemed to have elected to proceed under clause (ii) above. If Buyer elects (or is deemed to have elected) to proceed under clause (ii) above, Seller shall not compromise, settle or adjust any claims to such proceeds without Buyer’s prior written consent.
Material Casualty. If all or parts of the Leased Premises are damaged by fire or other casualty and the cost to repair such damage exceeds 50% of the replacement cost of the improvements (a "Material Casualty"), this Lease may, at the election of Lessor or Lessee, be terminated as of the date of the casualty. Within 60 days of such Material Casualty, if Lessor or Lessee desires to terminate this Lease, such party will so notify the other party hereto. If the damage does not constitute a Material Casualty or if neither party elects to terminate this Lease as permitted, Lessor shall make all repairs and restore the Leased Premises promptly in accordance with Section 6.01. If Lessor does not substantially complete the repair and reconstruction within one hundred eighty (180) days after the loss or damage occurs, Lessee may, at its election, terminate this Lease by written notice to Lessor.
Material Casualty. If the amount of the repair or restoration of the Property required by a Casualty equals or exceeds twenty percent (20%) of the Purchase Price (a “Material Casualty”), then Purchaser shall have the right to elect, by providing written notice to Seller within fifteen (15) Business Days after Purchaser’s receipt of Seller’s written notice of such Casualty, to (i) terminate this Agreement, in which case the Parties shall have no further rights or obligations under this Agreement, except those which expressly survive such termination, or (ii) proceed to Closing, in which case Seller shall provide Purchaser with a credit against the Purchase Price in an amount equal to the costs and expenses required to repair or restore the Property affected by the Material Casualty as agreed to by the Parties. If Purchaser (1) fails to provide written notice of its election to Seller within such time period, or (2) provides written notice of its election to proceed to Closing, but subsequently the Parties are unable to agree on the amount of the credit to be provided to Purchaser at Closing despite a good faith effort by Purchaser to so agree, Purchaser shall be deemed to have elected to terminate this Agreement pursuant to clause (i) of the preceding sentence. If the Closing is scheduled to occur prior to the expiration of Purchaser’s election period, then the Closing shall be postponed until the date which is five (5) Business Days after the earlier of Purchaser’s delivery of its election notice to Seller or the expiration of Purchaser’s election period.
Material Casualty. In the event of any material casualty to the Project, Lessee shall promptly give written notice to Lessor thereof. Except as set forth herein, Lessee shall be responsible for the Restoration of the Leased Property and Lessee shall be entitled to the use of all available proceeds from any insurance for purposes of completing the Restoration. In such event this Agreement shall continue in full force and effect, without abatement, unless otherwise set forth below. If the proceeds from any casualty insurance are insufficient to complete the Restoration, Lessee shall fund any excess required to complete the Restoration except for funds attributed to Lessor Capital Improvements. Lessor shall provide Lessee with the funds necessary to fund any costs to complete the Restoration for Lessor Capital Improvements. Absent receipt of Lessor’s agreement to fund such excess amounts within 30 days, Lessee may elect to terminate this Lease upon notice to Lessor within 20 days after the expiration of the 30 day period.
Material Casualty. The absence of any material damage by casualty to the Improvements which has not been repaired by the Closing Date. For the purposes hereof, a "MATERIAL DAMAGE BY CASUALTY" shall be deemed any damage by fire or other casualty which has not been repaired and paid for by the Closing Date and for which the estimated cost of the remaining repairs exceeds Fifty Thousand Dollars ($50,000). If the Improvements suffer any material damage by casualty Purchaser shall have the right and option to terminate this Agreement within fifteen (15) days after the date Purchaser is notified of the casualty in writing or by the Closing Date, whichever first occurs. Seller shall also have the right to cancel this Agreement if such material damage by casualty is not covered by existing insurance policies held by Seller, unless Purchaser is willing to reduce the purchase price by the amount estimated to be necessary to pay the labor and material costs to restore the damage. If Purchaser does not elect to terminate this Agreement by the Closing Date as a result of any material casualty damage, this transaction shall close without increase or decrease in the purchase price, and Seller shall assign to Purchaser all insurance proceeds which are paid because of the casualty. If the estimated cost to repair any damage by casualty as of the Closing Date is less than Fifty Thousand Dollars ($50,000), Purchaser shall not have the right to terminate this Agreement because of such casualty and Seller shall assign to Purchaser all insurance proceeds that are paid because of the casualty, as stated above. All repair cost estimates referred to in this paragraph shall be made by reference to a fixed price construction contract which Seller shall obtain as promptly as is reasonably possible after the date of the casualty.
Material Casualty. All risk of loss to the Property shall remain with Seller prior to Closing. If the Property is damaged by any casualty or other occurrence prior to the Closing, Seller shall promptly notify Buyer in writing (the “Casualty Notice”). The Casualty Notice shall include a description of the damage in reasonable detail, Seller’s estimate of the time and cost to repair the damage, and Seller’s good faith reasonable determination as to whether or not the casualty damage is covered by Seller’s insurance. If the Property is materially damaged prior to Closing and Seller is either unable or unwilling to restore the Property prior to Closing to substantially the same condition it was prior to the casualty, then at Buyer’s sole option, Buyer may (i) elect to terminate this Agreement by giving written notice of such election to Seller and the Title Company not later than the Closing Date, in which event all obligations of the parties hereunder shall terminate (other than those matters which expressly survive the early termination of this Agreement), and this Agreement shall otherwise have no further force and effect, or (ii) elect to take the Property as it then is, in which event the parties will proceed to Closing pursuant to the terms hereof without abatement of the Purchase Price. ▇▇▇▇▇’s failure to give timely notice to terminate this Agreement as provided above shall be deemed to be an election to proceed to close the transaction in accordance with the terms of this Agreement.
Material Casualty. Within 60 days of a Material Casualty at any Property, Lessee shall have the option, but not the obligation, to either:
(i) deliver a rejectable offer to Lessor (a "Casualty Substitution Offer") to substitute a Substitute Property for the affected Property pursuant to the terms and conditions of Section 55 of this Lease; or
(ii) make a payment (a "Casualty Termination Payment") to Lessor to terminate this Lease with respect to the affected Property in an amount equal to the sum of (x) the Applicable Percentage for the affected Property multiplied by the aggregate Base Annual Rental and Additional Rental for the remaining Initial Term, and (y) the Prepayment Charge corresponding to the affected Property. All Casualty Termination Payments shall be made on a regularly scheduled Base Monthly Rental payment date upon no less than 30 days prior written notice from Lessee to Lessor. Lessor shall have 120 days from the delivery of a Casualty Substitution Offer satisfying the requirements of Section 55 to accept or reject that offer in its sole discretion. Lessor's failure to deliver notice of acceptance or rejection of the offer within such time period shall be deemed to constitute Lessor's acceptance of that Casualty Substitution Offer. If the Mortgage corresponding to the affected Property is still outstanding, any rejection of the Casualty Substitution Offer by Lessor shall not be effective unless it is consented to in writing by Lender and such written consent is delivered to Lessee within that 120-day period (Lender shall be deemed to have objected to Lessor's rejection of such Casualty Substitution Offer if Lender does not consent to or object to Lessor's rejection of such Casualty Substitution Offer within such 120-day period).
Material Casualty. If, prior to the Closing Date, all or a Material Portion of the Real Property and Improvements is destroyed or damaged by fire or other casualty, Seller will notify Purchaser of such casualty. Purchaser will have the option to terminate this Agreement upon notice to Seller given not later than the earlier to occur of (x) the Closing Date or (y) ten (10) days after receipt of Seller’s notice. If this Agreement is so terminated, the Deposit will be promptly returned to Purchaser and thereafter neither Seller nor Purchaser will have any further rights or obligations to the other hereunder except to the extent otherwise specifically provided in this Agreement. If Purchaser does not elect to terminate this Agreement, Seller will not be obligated to repair such damage or destruction but (a) as to the Real Property and/or Improvements, Seller will assign and turn over to Purchaser all of the insurance proceeds paid to Seller (or, if such proceeds have not been awarded, any and all of Seller’s right, title and interest therein), net of reasonable collection costs, with respect to such fire or other casualty, and (b) the parties will proceed to Closing pursuant to the terms hereof without abatement of the Purchase Price, except that, as to the Real Property and/or Improvements Purchaser will receive a credit for the lesser of (i) any insurance deductible amount or (ii) the cost of such repairs as reasonably estimated by Seller.
Material Casualty. If, prior to Closing, any part of ▇▇▇▇▇ Point Gas Plant is damaged or destroyed by a Casualty and the amount of aggregate damages caused by one or more Casualties exceeds the Casualty Threshold, Seller shall promptly notify Buyer of such Casualty. Each of Buyer and Seller will then have a right to terminate this Agreement by written notice to the other Party. If neither Party elects to so terminate this Agreement, Buyer shall proceed to purchase the Assets, and the Purchase Price shall be reduced by Seller’s share of the repair cost or replacement cost, as applicable, of such damaged or destroyed assets.