hell or high water clause

At RJ Young they do not use “Hell or High Water” clauses that obligate customers to commit to unconditionally pay all of the lease payments provided in its lease agreement no matter what kind of service they provide. A hell or high water clause in a contract is a provision that states that a purchaser must pay the stipulated payments at the time regardless of any encounter.3 min read. https://www.investopedia.com/terms/h/hellorhighwater.asp https://en.wikipedia.org/wiki/Hell_or_high_water_clause http://www.businessdictionary.com/definition/hell-or-high-water-clause.html, Academic Research on Hell or High Water Clause, Cite this article as:"Hell or High Water Contract – Definition," in, Real Estate, Personal, & Intellectual Property, https://thebusinessprofessor.com/lesson/hell-or-high-water-contract-explained/, https://www.investopedia.com/terms/h/hellorhighwater.asp, https://en.wikipedia.org/wiki/Hell_or_high_water_clause, http://www.businessdictionary.com/definition/hell-or-high-water-clause.html, and Third Party Beneficiary Theory in Article 2A of the Uniform Commercial Code. 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. ­Leasing gives Courts have historically ruled that the clause is valid in different lawsuits. ? possible, it is likely in the case of most equipment leases, and virtually all 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. Back To: Real Estate, Personal, & Intellectual Property. 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. meet your satisfaction, they will make it right. To protect your business, look for a partner that offers true in-house leasing and if not, demand that the “Hell or High Water” clause be omitted from your equipment lease. Provision in a contract that commits a party to keep on performing its part even if the other party is not doing so. functioned, or stuck with unusable, non-functioning equipment in the case A hell or high water clause is a clause in a contract, usually a lease, which provides that payments must continue irrespective of any difficulties which the paying party may encounter. Does your office equipment lease contain a “Hell or High Water” clause? While parties must comply with their contractual obligations when a project is shut down, they must also be forward looking; this includes reviewing their agreements to learn lessons from the effect of previous pandemics like covid-19 and other unforeseen circumstances. the duration of the partnership. No need to spend hours finding a lawyer, post a job and get custom quotes from experienced lawyers instantly. SUBSCRIBE for UNLIMITED access to news and premium content. A hell or high water clause in a contract is a provision that states that a purchaser must pay the stipulated payments at the agreed time regardless of any difficulties he may encounter. 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. The lease contains provisions precluding any warranty liability whatsoever. Don’t bet on it. What ‘hell or high water’ clauses mean for construction contracts. Hell or high water clauses are protected by the Uniform Commercial Code (UCC). The “Hell or High Water” clause means the purchaser (your company) Many third-party companies include  “Hell or High Water” clauses in their leases, meaning the third-party company claims no liability if they deliver defective goods, fails to service the equipment, the equipment failed to operate properly, or the third-party company files for bankruptcy. (See Uniform Commercial Code (UCC) Article 2A-407) thousands of dollars a month for several years, for equipment that never Welcome to building.co.uk. Want High Quality, Transparent, and Affordable Legal Services? The expression seems to have its origins on the late 19th-century Midwest ranches where determined cowboys would drive their herds of cattle through high water and “hell.” Businesses may insist on having a hell or high water clause in their contracts for a number of reasons: Hell or high water clauses are usually part of construction and equipment leasing industry contracts. It is intended to limit the applicability of the doctrines of impossibility or frustration of purpose. The phrase “hell or high water” is usually not included in the contract because it has limited meaning legally. ability to outperform any of its competitors in the area of customer service 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. The term for the clause comes from a colloquial expression that a task must be accomplished "come Hell or high water" that is, regardless of any difficulty. The clause is normally intended to reduce the possibility of the purchaser breaching the contract with the excuse that the contract became impossible to fulfill. Additionally, lessee [buyer] will not assert against any assignee of this Agreement any defense, counterclaim, setoff or recoupment by reason of any past, present, or future claims which lessee [buyer] may have against lessor [seller]. If they fail to Copy & paste this HTML in your website to link to this page. “hell or high water” clause and an agreement that the lease was an Article 2A finance lease is enforced – notwithstanding that the lessor was a vendor of the equipment which had made a “Total Satisfaction Guarantee” in the two leases stating that the lessor would replace any equipment with which the lessee was not totally satisfied. Boilerplate Clauses In Commercial Contracts. As a matter of fact, they do the opposite. Consumer Leases Under Uniform Commercial Code Article 2A, or Article 2A: How Legislatures and Practitioners Can Cope with Several Drafting Anomalies in Article 2A of the Uniform Commercial Code, A Review and Analysis of the New Article 2A-Leases Amendment to the UCC and Its Impact on Secured Creditors, Equipment and Finance Lessors, The Uniform Commercial Code Survey: Leases, Brothers at Arm’s Length: UCC Article 2A, Captive Finance Companies, and the Close-Connection Doctrine, Competition Law in Merger Transactions: Managing and Allocating Risk in the New Normal. Article 2A of the code, in particular, gives special protection to the clause. equipment leases with third-party lessors. In a merger or purchase agreement, a hell or high water clause may be included when one of the parties to the agreement requires the other to take on all the antitrust risk arising from the transaction. Rethinking Design: Housebuilders’ initial responses to the pandemic, Video interview: ISG construction boss Zoe Price on how covid has forced change, The office of the future – and why we need it, Housebuilding rates are falling off a cliff - it’s time to act. Will This Venerable Leasing Construct Survive the Expanding Use of Managed Solutions Transactions? You will receive: Get access to premium content subscribe today. The “Hell or High Water” clause means the purchaser (your company) can be required to pay hundreds or thousands of dollars a month for several years, for equipment that never functioned, or stuck with unusable, non-functioning equipment in the case of flood, fire or other physical damage to the equipment. A hell or high water clause is a clause in a contract, usually a lease, which provides that the payments must continue irrespective of any difficulties which the paying party may encounter (usually in relation to the operation of the leased asset). hbspt.forms.create({portalId: "1719204",formId: "5c7f6791-3ccb-4a3a-bb32-f6d71d999329"}); Relocation of equipment between your locations. the flexibility to amend your lease in any way. There are provisions to enforce hell or high water contracts notwithstanding defects in the property or equipment leased out. The clause usually forms part of a parent company guarantee. same place and not working with third-parties. Does this sound impossible? In this case, the payments may help with repairs or financing. A festival focused on the future of digital construction, All the latest evidence from the Grenfell Inquiry, Register for upcoming webinars and view on demand, Clients may start insisting firms fulfil their contractual obligations regardless of any difficulties, pandemics included. If you plan to lease office equipment or have a lease in place, you owe it to yourself and your company to read the fine print carefully. term, giving them the latest technology. The term is derived from the expression “come hell or high water”, which means the action or obligation must be performed regardless of any difficulties. In lease contracts, for example, a lessee may be forced to keep on paying the rent even if the leased property is defective, unusable, or destroyed in an accident. It is a well-confirmed postulation of common law that HOWH place an absolute, irrevocable and unconditional obligation on the lessee to make the necessary lease payments, notwithstanding the happening of any circumstance of any nature whatsoever [8]. The effects of covid-19 on construction projects continue to evolve as an increasing number of countries, including the UK, issue orders suspending construction projects.

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