Hell or High Water Contract - Explained
What is a Hell or High Water Contract?
If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.
- Marketing, Advertising, Sales & PR
- Accounting, Taxation, and Reporting
- Professionalism & Career Development
Law, Transactions, & Risk Management
Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
- Business Management & Operations
- Economics, Finance, & Analytics
Back To: Real Estate, Personal, & Intellectual Property
What is a Hell or High Water Contract?
A hell or high water contract is a non-cancelable agreement by which the lessee is legally obliged until the expiration of the contract, to continue making stipulated installment payments to the lessor, irrespective of any complications they may run into during usage of the leased property or equipment.
How is a Hell or High Water Contract Used?
A hell or high water contract ensures that the lessee continues to make payments to the lessor notwithstanding any problems that the lessee might encounter in operating a leased equipment or putting a leased property to gainful use.
Implementation of Hell or High Water Contracts
There are provisions to enforce hell or high water contracts notwithstanding defects in the property or equipment leased out. Equipment malfunction cannot be cited as a reason for non-payment of installments. Often, the lessor is only involved with the fiscal aspects of the project and plays no role in connection with the equipment itself. There are cases where the lessor does not even come in direct contact with the equipment earmarked for lease. In fact, in many instances, the lessor buys the equipment as requested by the would-be lessee and then hands it over after the signing of the hell or high water contract. As such, any defects that might affect the equipment after this handover would be deemed as liabilities to be shouldered by the lessee rather than the lessor Issues such as manufacturing defects will have to be settled between the lessee and the manufacturer. In several instances, lessees have moved court attempting to evade hell or high water contracts or leases by asserting that the lessor or vendor have fraudulently lured them into what they have now come to perceive as a dubious arrangement. Often times, the lessor is accused of inducing the lessee into a hell or high water contract by deliberately misrepresenting facts about the condition of equipment leased. Hell or high water contracts are most visible during venture finance dealings, takeovers and high-yield bonds and indentures. Hell or high water clauses in takeover deals not only make it mandatory for soon-to-be lessees to facilitate uninterrupted payments but also make it obligatory for them to assume responsibility for any future divestments or lawsuits that might emerge from antitrust laws being sanctioned against the property or equipment. Naturally, in several cases, the existence of such hell or high water clauses in agreements prove to be a formidable deterrent for prospective buyers to opt out of the arrangement.
- Property Law (Intro)
- Tangible and Intangible property?
- Knowledge Capital
- Calculated Intangible Value
- Real and Personal Property?
- Littoral Land
- Readily Removable Fixtures
- What is ownership?
- Role of Government in ownership of property?
- Allodial System
- Role of property rights in economic activity?
- What are the limitations on property ownership rights?
- What is nuisance?
- What is Zoning?
- What is Eminent Domain?
- Just Compensation
- What is Property Taxation?
- Assessment Ratio
- Millage Rate
- Homeowners Association (HOA)
- Rule of First Possession?
- Lost or Mislaid Items?
- Adverse Possession?
- Establishing and transferring ownership in real property?
- Absolute Title
- Warranty Deed
- Register of Deeds
- What is a fee simple interest in real property?
- Absolute Interest
- Restrictive Covenant
- What is a life estate in real property?
- What is a leasehold estate in real property?
- What are common types of co-ownership relationships in real property?
- Owning Real Estate Personally vs as LLC
- What if Co-Owners of Real Estate Want Out
- Community Property and Separate Marital Property?
- What is an easement interest in real property?
- What is a license of real or personal property?
- Bundle of Rights
- Absorption Rate
- Fair Housing Act
- Federal Housing Administration (FHA)
- Housing and Urban Development (HUD)
- National Housing Act
- Design Build Contract
- Building Permits
- Certificate of Acceptance
- Construction Surety Bond
- Acquisition, Development, and Construction Loan (ADC)
- Flipping (Real Property)
- Buy, Strip, and Flip
- Homeowner Affordability and Stability Plan
- Building Residual Method
- Accessory Dwelling Unit
- Property Management
- Cost-Plus Contract
- Real Estate Investment Fund
- Listing Agreement
- Property Lawyers
- Multiple Listing Service
- Home Equity
- Register of Deeds
- Title Search
- Opinion of Title
- Certificate of Title
- Abstract of Title
- Chain of Title
- Clear Title
- Cloud on Title
- Defective Title
- Defect of Record
- Action to Quiet Title
- Affidavit of Title
- Warranty of Title
- Title Insurance
- American Land Title Association (ALTA)
- Earnest Money
- Private Mortgage Insurance
- Closing (Property)
- Settlement Statement
- Real Estate Settlement Procedure Act (RESPA)
- HUD-1 Form
- Closing Statement
- Closing Costs
- Buying Real Estate as an LLC
- What is a mortgage?
- What are the Rights of a Mortgage Holder?
- Deed of Trust or Security Deed?
- Trust Deed
- Certificate of Release
- Judicial Foreclosure
- Lis Pendens
- Short Sale
- Homeowners Protection Act
- Deed in Lieu of Foreclosure
- Tax Deed
- Tenancy at Will
- Closed End Lease Definition
One Percent Rule
- Net Lease
- Triple Net Lease (NNN)
- True Lease Definition
- Land Lease Option
- Hell or High Water Contract
- Habendum Clause
- Implied Warranty of Habitability
- Emblements Definition
- What is a bailment?
- Unilateral-benefit and mutual benefit bailments?