What ‘hell or high water’ clauses mean for construction contracts
Clients may start insisting firms fulfil their contractual obligations regardless of any difficulties, pandemics included
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.
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.
Although not widely used in building contracts currently, the economic consequences of this pandemic and possible future “waves” could cause parties to seek to shift the risk of delay to their counterparty in the future by including a “hell or high water” (“HOHW”) clause. Such clauses describe an independent and absolute contractual obligation of a party to perform under an agreement without any contractual defense, including force majeure.
This is PREMIUM content, available to subscribers only
You are not currently logged in. Subscribers may LOGIN here.