escalator clause
An escalator clause in the contract adjusts the rent based on the cost of living index.
Noun: A contractual provision that automatically adjusts wages, prices, benefits, or other payments based on the fluctuation of a specified external index or condition, such as the cost of living.
An escalator clause is used in formal agreements to ensure that the value of payments keeps pace with economic changes without requiring renegotiation of the entire contract. - The union negotiated an escalator clause tied to the Consumer Price Index to protect workers' salaries from inflation. - The long-term supply contract includes an escalator clause that adjusts the price per barrel based on global oil market trends.
- "to be linked by an escalator clause": Describes a payment or price that is contractually tied to a variable index.
- The annual service fee is linked by an escalator clause to the national inflation rate.
- "to trigger the escalator clause": Describes the event when the specified condition is met, causing the automatic adjustment.
- A rise in the cost-of-living index above 5% will trigger the escalator clause in our lease.
- Escalation clause: A synonymous term, often used interchangeably with "escalator clause."
- Cost-of-living adjustment (COLA): A specific type of escalator clause applied to wages or pensions based on inflation metrics.
- Indexation: The broader economic practice of adjusting values based on an index, of which an escalator clause is a contractual example.
- Adjustment clause
- Variable clause
- Sliding-scale clause
- Price escalation clause: A specific type of escalator clause focusing on the price of goods or services.
- The construction contract contained a price escalation clause for raw materials.
- Wage escalator: A clause specifically applied to employee compensation.
- The new agreement features a wage escalator to maintain purchasing power.
While often associated with increases, an escalator clause can theoretically provide for decreases if the specified index falls, though such provisions are less common in practice. The term is primarily used in legal, labor, and commercial contexts.
An escalator clause in the contract adjusts the rent based on the cost of living index.
- a clause in a contract that provides for an increase or a decrease in wages or prices or benefits etc. depending on certain conditions (as a change in the cost of living index)