Price Escalation
/ˈpraɪs ˌɛskəˈleɪʃən/
Definitions
- (n.) A contractual provision allowing adjustment of the contract price based on changes in specified cost indices or economic conditions.
The contract included a price escalation clause to account for fluctuating material costs.
- (n.) An increase in price mandated by law or regulation, often due to inflation or changes in tariffs.
The regulatory price escalation required utility companies to adjust their rates annually.
Forms
- price escalation
Related terms
See also
Commentary
Price escalation clauses help allocate risks of cost changes between contracting parties, commonly used in construction and supply agreements.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.