Technology Terms Glossary
What is Escalator Clause?
An escalator or escalation clause refers to a provision that triggers an increase in prices or wages. These clauses are part of the contracts and become activated when parties meet specific conditions. The condition can be inflation rate or cost of living. People leverage escalator clauses to opt for long-term and extensive contracts.
With an escalator clause, individuals also don’t have to worry about future market growth. Essentially, escalator clauses ensure wage increase so long as there is a specific change in inflation. Simultaneously, it protects landlords who may miss out on high rental payments.
Escalator Clause Benefits
Some of the benefits of the Escalator Clause include:
- Pro 1: Effective way to forward an offer
- Pro 2: escalation clauses can be different for different sellers
- Pro 3: an objective strategy to stay relevant
Here is a full article about the escalator clause.