Hell or high water clause
Encyclopedia
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). The clause usually forms part of a parent company guarantee
. It is intended to limit the applicability of the doctrines of impossibility
or frustration of purpose
. 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.
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
, usually a lease
Lease
A lease is a contractual arrangement calling for the lessee to pay the lessor for use of an asset. A rental agreement is a lease in which the asset is tangible property...
, 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). The clause usually forms part of a parent company guarantee
Parent company guarantee
A parent company guarantee is a guarantee by a parent company of a contractor’s performance under its contract with its client, where the contractor is a subsidiary of the parent company.-References:...
. It is intended to limit the applicability of the doctrines of impossibility
Impossibility
In contract law, impossibility is an excuse for the nonperformance of duties under a contract, based on a change in circumstances , the nonoccurrence of which was an underlying assumption of the contract, that makes performance of the contract literally impossible...
or frustration of purpose
Frustration of purpose
In the law of contracts, frustration of purpose is a defense to enforcement of the contract. Frustration of purpose occurs when an unforeseen event undermines a party's principal purpose for entering into a contract, and both parties knew of this principal purpose at the time the contract was made...
. 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.