Hell or High Water Clause
(Equipment Leasing)

Summary

This hell or high water clause requires a lessee to make all rental payments and fulfill all of its obligations under an equipment lease, including if the lessor breaches the equipment lease or if the equipment is lost, stolen, damaged, or destroyed. This template includes practical guidance and drafting notes. This clause requires the lessee to pay the lessor the full amount of the lease “come hell or high water”— that is, even if the equipment does not function properly and even if the lessor’s performance after the lessee’s acceptance of the goods is not in accordance with the lease contract. Even though “hell or high water” protection is automatically extended to finance lessors who qualify under the UCC, it is prudent to include a “hell or high water” clause in the lease just in case it is held that the lease is not a UCC finance lease. For additional guidance, see Master Equipment Lease Agreements, Terms and Conditions Checklist (Equipment Leasing), Structure and Classification of Lease Checklist (Equipment Leasing), and Equipment Leasing Resource Kit.