Managers and the Legal Environment 7th Edition by David Madsen, Constance Bagley

Exercise 6

George Lu was named the executive director of the Cornell University Foundation, a nonprofit association organized to support the university. As part of its efforts, the foundation has begun a program to preserve open-space land and ecologically sensitive environments near the university's campus in upstate New York. The foundation plans to buy or receive gifts of land, especially from alumni, and then sell the land to public entities for permanent preservation. The difference between the purchase price and the sale price will be used to finance the association's efforts and to support Cornell generally. One of Lu's first tasks is to develop a protocol and prepare model agreements for making acquisitions.
a. As a nonprofit, educational organization, does the association have potential liability under the environmental laws?
b. What procedures should Lu establish to protect the association from potential environmental law liabilities in connection with its acquisitions?
c. What kinds of contractual arrangements should be considered to protect the association from environmental law liabilities? [ See, e.g.,United States v. Alcan Aluminum Corp. , 34 E.R.C. 1744 (N.D.N.Y. 1991).]