escalator clause

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Escalator clause

Provision in a contract allowing cost increases to be passed on. In an employment contract, for example an escalator clause may call for wage increases in line with inflation.

Escalator Clause

A clause in a contract stating that a certain payment increase will grow each year according to some formula stated in the contract. For example, an employment contract may have an escalator clause allowing for small increases in salary each year. An escalator clause usually exists to protect one party to the contract from inflation.

escalator clause

See escalation clause.

References in periodicals archive ?
The application of this escalation clause however, would create an increase between the 9th and 10th year of the term of $1,662.00 per month!
Thus, there is no unanimity in the construction of a tax escalation clauses when changes of circumstances cause the original landlord not to be the one who actually pays the real estate taxes.
Most commercial leases contain a tax escalation clause which provides that the tenant will pay as additional rent his proportionate share of any increase in real estate taxes on the entire building.
The lease contained a tax escalation clause which stated that the tenant (Bryant Imports Inc.) shall pay as additional rent, 3 percent of any increase in real estate taxes over those assessed for the building for tax year 1974/1975.
The landlord in this case argued that the tax obligation on the building is increased even though the obligation to pay the taxes was merely shifted from the landlord, 1100 Associates, to another tenant, HBO; and that the shifting of the obligation to pay the tax does not nullify the effect of the tax escalation clause under the lease with Bryant Imports.
He stated that he would award the landlord the additional rent under the lease tax escalation clause. He stated that the majority's reliance upon precedents was misplaced.
Some owners, as well as tenants with escalation clauses, will be paying higher taxes since the transitional assessment will be above last year's billable assessment.
Under the contract Altenesol will pay U.S 4.90/MMbtu with a 2% escalation clause over the 15 year contract period, which is a past through to the off-takers.