Inflation Adjustment Clause
/ɪnˈfleɪʃən əˈdʒʌstmənt klɔːz/
Definitions
- (n.) A contractual provision that modifies payment obligations or monetary amounts based on changes in an inflation index to preserve purchasing power.
The lease included an inflation adjustment clause to increase rent annually according to the consumer price index.
Forms
- inflation adjustment clause
Related terms
See also
Commentary
Often used in long-term contracts to protect against inflation risk; drafters should specify the index and adjustment frequency precisely.
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