Price Escalation Clause
/ˈpraɪs ˌɛskəˈleɪʃən klɔːz/
Definitions
- (n.) A contractual provision allowing adjustment of the contract price in response to changes in costs or economic conditions during the term of the agreement.
The construction contract included a price escalation clause to accommodate rising material costs.
Forms
- price escalation clause
- price escalation clauses
Related terms
See also
Commentary
Price escalation clauses are critical in long-term contracts to allocate the risk of cost fluctuations between parties effectively.
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