Escalation Agreement
/ˌɛskəˈleɪʃən əˈɡriːmənt/
Definitions
- (n.) A contractual clause or arrangement providing for automatic periodic increases in price, rates, or wages to adjust for factors like inflation or rising costs.
The escalation agreement ensured that the contractor's fees would increase annually based on the consumer price index.
Forms
- escalation agreement
- escalation agreements
Related terms
See also
Commentary
Often used in long-term contracts to manage economic changes, careful drafting is needed to specify triggers and calculation methods to avoid disputes.
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