Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb. When analyzing any commercial lease it is always advisable to have the lease reviewed by legal counsel and pay close attention to the local state real estate laws. in 1987,1 the National Conference of Commissioners on Uniform State Laws and the American Law Institute sought to es- Inclusion of a Throughout the opinion, the court emphasized that, given that Delaware is a “contractarian” jurisdiction, it will rely on the specific words of the merger agreement and will not “read in” concepts that the parties did not specifically provide for. This decision illustrates some of the limits of “hell or high water” lease provisions and holder in due course status for assignees in the context of a leasing company’s . The court emphasized a strongly contractarian approach. Share it with your network! Hell or high water clauses bind the purchaser or lessee to the terms of the contract until the contract's expiration. The “hell or high water” provision in an equipment lease agreement is a provision that makes a lessee’s obligation to pay rent irrevocable and independent upon the acceptance of the leased equipment. When a Contract Cannot Be Enforced Even If It Has a Hell or High Water Clause, 4. There are a number of clauses that can be used in a contract to try to limit the excuses that a party has for breaching the contract. There, a lessee sought to avoid its obligations to make payment on a lease for copiers after the equipment was damaged when the lessee’s offices were flooded during Hurricane Sandy. A true lease is a type of multi-year lease where the lessor bears both the risks and rewards of property ownership. The lessee in such an agreement usually selects the equipment they wish to procure. The viability of the acquisition agreement could be tied directly to the buyer's ability to resolve such matters and clear the way for the deal to proceed. High Water Mark. Popular clauses apart from the hell or high water clause include the following: If you need help with the hell or high water clause in your contract, you can post your legal need on UpCounsel's marketplace. The lease in A conditional sales agreement grants possession of an asset to the buyer, but not legal ownership until the sale price is paid in full. The equipment may be shipped directly from the manufacturer or supplier to the lessee without the lessor ever coming into contact with it. The term comes from the expression "come hell or high water," which means an action or obligation must be performed no matter what happens and in spite of all difficulties. ;Datronic Rental Corporation, et al. Antitrust Risk Allocation Provisions: Types • “Hell or high water” – Except to the extent otherwise provided in Section X, upon the terms and subject to the conditions of this Agreement, each of the partieshereto shall(i) make promptly its respective filings and thereafter make any A lessor is a person or other entity that owns an asset but which is leased under an agreement to the lessee. Was this document helpful? Firstly, lessors will seek to reinforce the wording of their standard documentation to minimise the risk of this line of argument ever succeeding again. No need to spend hours finding a lawyer, post a job and get custom quotes from experienced lawyers instantly. 2. Hell or high water contracts can be enforced even in instances where there is some fault or defect in the property at the center of the agreement. In the event that a party receives a subpoena or civil investigative Hell-or-High-Water Lease. Hire the top business lawyers and save up to 60% on legal fees. Hell or high water clauses are protected by the Uniform Commercial Code (UCC). Precise wording is used to show that the purchaser will pay all sums unconditionally regardless of difficulties. Often, the lessor is only involved with the fiscal aspects of the project and plays no role in connection with the equipment itself. Courts have historically ruled that the clause is valid in different lawsuits. Hell or high water contracts require payment whether or not the good or service is working as planned. Akorn argued that, as a result of its failure to diligently obtain FTC approval, Fresenius … Any warranties regarding the functionality of the equipment might fall to the supplier or manufacturer to fulfill. Provision in a contract that commits a party to keep on performing its part even if the other party is not doing so. Sample Antitrust -Related Provisions in M&A Agreements . A Standard Clause that may be used in a purchase or merger agreement when a seller or target company wishes the buyer to take on all of the antitrust risk in a transaction, known as a hell or high water (HOHW) provision, including making any divestitures required to close … The payments will enable the supplier to stay afloat despite difficulties like equipment breakdown. Hell Or High Water Clause. The expression ‘come hell or high water’ originated in America. Examples of just some of the other provisions that feature in this matrix include: 1. A Standard Clause that may be used in a purchase or merger agreement when a seller or target company wishes the buyer to take on all of the antitrust risk in a transaction, known as a hell or high water (HOHW) provision, including making any divestitures required to close the transaction and litigating any antitrust challenges. Article 2A of the code, in particular, gives special protection to the clause. In the context of: The vendor or lessor might only handle the financing aspect of the transaction and otherwise hold a passive role regarding the equipment itself. The term comes from the expression "come hell or high water," which means an action or obligation must be performed no matter what happens and in spite of all difficulties. Lessors should ensure that their clauses identify all the elements of operational risk that are to be borne by the lessee, so that it can be plainly shown that the parties intended that such risk was to be borne by the lessee. Examples of case law exist however; which uphold the "hell or high water" clause as well as the constructive eviction argument. For example, it should always be remembered that Article 2A supports provisions commonly found in equipment leases, under which a lessee has no right to require the lessor to repair or replace defective equipment or to withhold rents while defective equipment is being repaired. 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. Bar a few exceptions, U.S. courts in most states enforce the hell or high water clause in contracts. Some suppliers of equipment insist on the clause to be able to supply uninterrupted. GlossaryHell or High WaterUsually describes an independent and absolute contractual obligation of a party (known as a hell or high water clause or provision). Why You May Need a Hell or High Water Clause, 2. The clause is normally intended to reduce the possibility of the purchaser breaching the contract with the … Akorn pointed to evidence showing that, for example, Fresenius had temporarily pursued a settlement strategy with the FTC that it knew would delay antitrust approval by two to three months. Flaws in the equipment may be because of an issue with its manufacturing. 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