escalation clause


Definitions (3)

1.Construction: Provision in a contract for increasing or decreasing the contracted price for labor, material, etc., in step with the market prices or an agreed upon benchmark such as consumer price index (CPI).
2.Leasing: Provision in property lease agreements that allows a landlord to raise rent if the cost of maintaining or operating the building goes up.
3.Lending: Provision in loan agreements that permits a lender to raise interest rate if the market interest rates go over a certain ceiling, or if some contingency occurs (such as a fall in the borrower's credit rating). Also called escalator clause.

Related Videos

Mentioned in these terms

Have a question about escalation clause? Ask for help in the
Browse by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z