This risk can refer to the amount of capital committed. Generally speaking, hell or high water contracts are used when the provider of a service or product is taking a large risk on behalf of the client. Hell or high water contracts require payment whether or not the good or service is working as planned. Understanding Hell or High Water Contracts A hell or high water contract shifts almost all of the risk of nonperformance or default on to the obligee, and thus can induce lessors or lenders to agree to transactions that would otherwise be too risky for them.In lease or financing contracts, this means that the lessor or borrower is obligated to continue making payments even if the lease or financed asset is damaged or destroyed.A hell or high water contract is one where the obligee agrees to fulfill their end of the contract regardless of the difficulty.