Climate clause

Heads of Terms for Landowner Collaboration on Environmental Schemes

William's Clause

Heads of terms between two or more landowners for a comprehensive collaboration agreement in which they can designate land for entry into a publicly-funded environmental scheme, or a private project.

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Why use this?

This drafting can help landowners explore collaboration, pooling of resources and the type of schemes or projects they could enter and may also create the conditions for the landowners accessing investment from corporate and institutional investors who wish to appropriately offset their environmental impact or emissions.

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The clauses on this website (and published in our Climate Contract Playbook) have been prepared in good faith on a pro bono basis and are free to download and use. The clauses have been drafted and edited by a variety of lawyers and, as such, the approaches to drafting may not conform to any particular drafting norms. We acknowledge this as a consequence of the collaborative drafting process.

The clauses on this website (and published in our Climate Contract Playbook) are provided on an ‘as is’ basis and without any representation or warranty as to accuracy or that the clauses will achieve the relevant climate goal or any other outcome.

This website (and the Climate Contract Playbook) does not comprise, constitute or provide personal, specific or individual recommendations or advice of any kind, and does not contain legal or financial advice. The clauses are precedents for legal professionals to use, amend and negotiate using their professional skill and judgement and at their own risk.

While care has been taken in the drafting of these clauses, neither The Chancery Lane Project nor any of its contributors owe a duty of care to any party in relation to their preparation and do not accept any liability for any errors or omissions, nor for any loss incurred by any person relying on or using these clauses or any other person. Users should use their own professional judgement in the application of these clauses to any particular circumstance or jurisdiction or seek independent legal advice.

At present, all the clauses are based on the laws of England and Wales. We encourage the conversion of these precedent clauses for use in other jurisdictions.

The clause

Heads of Terms

Parties:

(a) [] (Party A)

(b) [] (Party B)

Land:

(a) That part of Party A’s land as is shown edged red on the plan annexed to these Heads of Terms (Red Land)

(b) That part of Party B’s land as is shown edged green on the plan annexed to these Heads of Terms (Green Land)

Scheme:

[Set out scheme or project or type of scheme or project]

Parties’ Solicitors:

(a) []

(b) []

Parties’ Agents:

(a) []

(b) []

Objectives:

Party A and Party B will enter into a collaboration agreement (Collaboration Agreement) to:

(a) identify a suitable Scheme in which to enter the Land, which:

(i) maximises the value of receipts to both Party A and Party B; and

(ii) is designed to improve the environmental benefits of the Land, including without limitation through climate change mitigation and the promotion of carbon sinks, biodiversity and nature based solutions,

with a minimum duration of [] years and a maximum duration of [] years;*

(b) work together to produce an expression of interest and to submit it to the entity administering the Scheme (Administrator);

(c) if accepted into the Scheme, covenant to:

(i) comply with the terms of the Scheme;

(ii) not carry out any Prohibited Activities on the Land;

(iii) not dispose of the Land during the period of the Scheme except to a person who enters into such documentation as the Administrator reasonably requires and a deed of covenant to comply with the terms of the Collaboration Agreement;

(iv) share the receipts of the Scheme in accordance with the Agreed Division[;]

[(v) not carry out any Additional Activities on the Land without the written consent of the other [and to pay the other party the Agreed Percentage during each year of the Scheme]]. 

* [Drafting note:  To achieve the desired environmental impact, the minimum duration of the agreement should be long enough to avoid short-termism of change in land-use, to avoid sequestered carbon being re-emitted once land is used for agriculture again.]

Environmental Benefit:

[Set out the environmental benefits of the proposed Scheme, such as potential outcomes in a local area or landscape and long term whole ecosystem recovery at scale.]

Prohibited Activities:

[Set out the activities which are not to be carried out by either Party on the Land.

Agreed Division:

[Set out the agreed division of the receipts of the scheme. This may be on a pro rata basis but there is the potential for it to be more nuanced if, for example, one party controls land essential to the delivery of the scheme.]

Agreed Responsibilities:

[Optional: where the Scheme carries certain obligations/ duties/ responsibilities this indicates how they should be divided between the parties.

Additional Activities:

[Optional. Specify activities which are not strictly covered by the Scheme but which the other party could legitimately say have only been made possible by inclusion within it.]

Agreed Percentage:

[Optional. See Objective (c)(v) above.]

Costs:

The parties will meet their own costs in connection with these Heads of Terms and the Collaboration Agreement. The Collaboration Agreement will record that the parties will each meet the costs of complying with the Scheme so far as it exclusively relates to their Land but that costs associated with the Scheme as a whole shall be borne in accordance with the Agreed Division. 

Liability:

[Set out a liability framework for circumstances in which activities undertaken on the pooled land result in loss or damage to the other party’s land or to the party who secures the carbon or environmental offset, or where one party does something which results in a breach of the scheme or offset.]

Ongoing funding and management:

[Set out the terms on which ongoing funding and management decisions will be made.]

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