Escalation clause

An escalation clause is a clause in a lease or contract that guarantees a change in the agreement price once a particular factor beyond control of either party affecting the value has been determined. An important example of this is a contract that adjusts for inflation.[1]

Escalation clauses are quite common in construction contracts to cover unexpected costs due to fluctuations in the prices for raw materials, fuel, and labor during the course of the construction project.

See also

References
  1. Crawford and Stewart. "Writing an escalation contract using the Consumer Price Index". US BLS. Retrieved 5 March 2014.


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