Infernal or flood contracts can also be applied in cases where an error or defect on the property is at the heart of the agreement. For example, if a lessee agrees to rent or lease a device or machine in hellish or flood conditions, he is responsible for these payments, that the device does not work. The seller or lessor can only take over the financial aspect of the transaction and, moreover, play a passive role with regard to the equipment itself. A hell or flood contract (also known as a promised-to-pay contract) is an unsynable contract in which the buyer must make the payments declared to the seller, regardless of the difficulties he may encounter. Hell or flood clauses bind the buyer or tenant to the contractual conditions until the expiry of the contract. Check the contract language to determine if the contract contains a hellish or floodable provision and/or a waiver of defense and set-off language. In all contractual disputes, the exact language of the contract is very important. Although currently not widespread in construction contracts, the economic consequences of this pandemic and possible future “waves” could lead the parties to try to transfer the risk of delay to their counterparty in the future by inserting a “hell or flood” clause (HOHW). These clauses describe an independent and absolute contractual obligation of a party to comply under an agreement without contractual defence, including force majeure. Infernal or flood-related contracts are most visible in venture finance transactions, acquisitions and high-yield bonds and bonds. Infernal or flood clauses in acquisition transactions not only require future tenants to make uninterrupted payments, but also require them to take responsibility for future assignments or actions that may arise from antitrust laws sanctioned against the property or equipment. Of course, in many cases, the existence of such hell or flood clauses in agreements is a huge deterrent for potential buyers to unsubscribe from the agreement.
In addition, the Tenth Circuit Court of Appeals found, with respect to the applicability of the clear or high water provisions, by financial firms and lenders that the term derives from the expression `Come Hell or High Water`, meaning that the action or obligation must be performed independently of the difficulties. In the past, these clauses are often found in non-construction contracts, such as equipment rental and project financing, as well as mergers and acquisition agreements. In several cases, tenants have changed lawsuits to circumvent infernal or flood contracts or leases by claiming that the landlord or seller fraudulently lured them into a deal they have now perceived as a dubious agreement. . . .