Environmental Law Advisory Bulletin
Hazardous Waste Disposal Contracts: Potential Liability for the Unwary
By Ame C. Wellman
[March 2005]
Whether it is a one-time disposal or a routine part of your company’s business, a hazardous waste disposal contract is a crucial agreement that should be reviewed and understood before it is signed. Hazardous waste transportation and disposal contracts differ significantly from other service contracts because of the unique nature of hazardous waste law. Federal hazardous waste law (the Resource Conservation and Recovery Act – RCRA) and Superfund law hold your company responsible for hazardous waste generated from cradle-to-grave. This means your company is on the hook to pay for correcting mismanagement of hazardous waste from the time the waste is generated through transportation, and after disposal. Contracts with hazardous waste transportation, treatment and disposal companies can provide protection from liability, but only if those contracts include the right provisions and are between the appropriate parties.
Some key contractual issues to consider:
1. Title. The transportation or disposal company should take title to the hazardous waste. The contract should provide that you are no longer responsible for the waste once it is loaded for transport. Otherwise, your company could be liable for a spill that occurs while your waste is in transit.
2. Indemnification. The disposal or transportation company should indemnify the generator for liability associated with the transportation, treatment and storage of the hazardous waste. Your company should be indemnified for all losses and damages that may occur as a result of the management of the waste during transportation, treatment or disposal – not just negligent acts. There have been many instances where liability will arise although no parties are at fault or have breached a contract. Consider the landfills that were legally operated but are now Superfund cleanup sites – companies and individuals who sent wastes to these Superfund sites are now paying to clean them up.
3. Insurance. The transportation and disposal companies should have adequate insurance. The contract should specify the minimum coverage limit for each loss and a higher aggregate limit.
4. Options. The contract should not limit your company’s disposal options. Beware of contracts that require that all hazardous wastes be transported or disposed of through the contractor or include automatic renewals or other conditions that make changing waste handlers difficult.
5. Parties. The contract should be between the transportation, treatment and disposal companies and you, not your consultant. Consultants often arrange for the transportation, treatment of disposal of the waste and enter into contracts to facilitate waste management. If you are not a party to the contract, you do not get the contractual protections. Make sure you are a party to the contract or are at least a third-party beneficiary.
This list is by no means exhaustive. At Davis Wright Tremaine, we have the technical expertise and experience to help you negotiate effective hazardous waste contracts that protect your rights. We have successfully assisted clients in disputes involving liability for environmental contamination at facilities throughout the western United States. We would be happy to discuss the specific issues your company faces regarding hazardous waste management, and welcome the opportunity to devise proactive strategies to address your company’s concerns.
For more information, contact:
This Environmental Law Advisory is a publication of the Environmental Law Department of Davis Wright Tremaine LLP. Our purpose in publishing this Advisory is to inform our clients and friends of recent developments in environmental law. It is not intended, nor should it be used, as a substitute for specific legal advice as legal counsel may only be given in response to inquiries regarding particular situations.
Copyright © 2005, Davis Wright Tremaine LLP.
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