escalation clause

Escalation Clause

A clause in a contract stating that the price of a good or service will increase if a cost increases correspondingly. For example, a supermarket may enter a contract with an apple distributor to buy apples at a certain price. However, an escalation clause may cause that price to increase if the cost of transporting the apples to the store goes up by a certain amount.

escalation clause

A clause in any of a wide variety of contractual or real property arrangements that allows one party to increase the price upon the happening of certain specified events. Longterm leases often have rent increases at 3- to 5-year intervals, with the adjustment being a certain stated amount,a percentage of then-current market rents,or an increase based on some index with the first year of the lease representing the benchmark and against which the index is measured.

Example: The parties agree that rent will increase in 5 years in the same proportion as the consumer price index (CPI) in 5 years bears to the current consumer price index. If the rent today is $4,000 per month and the CPI is 179, and in 5 years the CPI is 192, then the new rent is calculated at follows:

192 179 1.0726%

$4,000 1.0726% $4,290.40 per month

Other escalation clauses are used to increase the interest rate in a loan when there has been a default and to increase rent when a tenant remains in possession after expiration of its term.

单词	escalation clause
释义	DictionarySeeescalator clauseLegalSeeEscalator Clause escalation clause Escalation Clause A clause in a contract stating that the price of a good or service will increase if a cost increases correspondingly. For example, a supermarket may enter a contract with an apple distributor to buy apples at a certain price. However, an escalation clause may cause that price to increase if the cost of transporting the apples to the store goes up by a certain amount. escalation clause A clause in any of a wide variety of contractual or real property arrangements that allows one party to increase the price upon the happening of certain specified events. Longterm leases often have rent increases at 3- to 5-year intervals, with the adjustment being a certain stated amount,a percentage of then-current market rents,or an increase based on some index with the first year of the lease representing the benchmark and against which the index is measured. Example: The parties agree that rent will increase in 5 years in the same proportion as the consumer price index (CPI) in 5 years bears to the current consumer price index. If the rent today is $4,000 per month and the CPI is 179, and in 5 years the CPI is 192, then the new rent is calculated at follows: 192 179 1.0726% $4,000 1.0726% $4,290.40 per month Other escalation clauses are used to increase the interest rate in a loan when there has been a default and to increase rent when a tenant remains in possession after expiration of its term.
随便看	mental block mental blocks mental branches of mental nerve mental branch (of inferior alveolar artery) mental branch of inferior alveolar artery mental breakdown mental calculation mental calisthenics mental canal mental capacity mental capacity act mental capacity act 2005 mental case mental chronometry mental clarity mental competency mental condition mental confusion mental cruelty mental debilitation mental decline mental defective mental defectiveness mental defectives mental defense