What to keep in mind
Specify index, baseline, review period, currency, notice, unexpected cost increases and disagreements over calculations.
Vague adjustment formulas may create uncertainty or prove legally unenforceable.
Distinctions often confused
A price escalation clause differs from a general right to renegotiate all contractual terms.
Frequently asked questions
Can contracts provide for indexed prices?
Only within current applicable legal rules and proper drafting.
What if the agreed index ceases to exist?
A fallback or replacement methodology should ideally be agreed in advance.
Informational content. It is not a substitute for professional advice.