Escalator Clause

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Related to Escalator Clause: Graduated lease, index lease

Escalator Clause

A stipulation contained in a union contract stating that wages will be raised or lowered, based upon an external standard such as the cost of living index. A term, ordinarily in a contract or lease, that provides for an increase in the money to be paid under certain conditions.

Escalator clauses frequently appear in business contracts to raise prices if the individual providing a particular service or type of merchandise is forced to pay more for labor or materials.

Such clauses are also often part of contracts or leases executed subject to price-control regulations. When this type of provision is in a lease, a landlord has the power to collect the maximum amount of rent allowed under rent regulations that are in effect at the time of the lease. The escalator clause provides that if the rent regulations are altered during the time of the lease, the tenant must pay the new rental fee computed pursuant to the revised regulations.

escalator clause

n. a provision in a lease or other agreement in which rent, installment payments or alimony, for example, will increase from time to time when the cost of living index (or a similar gauge) goes up. Often there is a maximum amount of increase ("cap") and seldom is there a provision for reduction if the cost of living goes down or for deflation instead of inflation. (See: cap)

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This time, the federal government and the Band had their own lawyers involved, and they agreed on a draft for the lease and an escalator clause in the lease which said that when the major review came up after the first 20 year period that the annual rent was to be based on "6 percent of the current land value".
One view attributes the elimination of COLAs, or escalator clauses, to declines in inflationary uncertainty; a second view emphasizes the erosion of union power; yet another view focuses on structural shifts in the U.
The presence of an escalator clause in the contract at least partially insulates the union from losses in real wages due to inflation and should, therefore, make the union more willing to consent to a contract of greater duration.
These actions included increasing retainer fees or a la carte activity fees, hiking minimum annual fees on clients with smaller accounts and adding automatic fee escalator clauses to client agreements.
Some contract assemblers could provide a working number within a few days, but it would come with a list of caveats and unknowns and escalator clauses.