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 ?
However, many owners and tenants experience results different from those anticipated by the escalation clause whenever there are significant fluctuations in the occupancy of the building.
Looking forward, how would you characterize surcharges and/or escalation clauses relative to your traditional pricing structure?
This evolution of the CPI escalation clause resulted in the following 2 examples which were widely used: (Illustration of standard CPI clause with two choices of limiting clauses.
Nadler also has experience in the real estate sector where her expertise encompasses such areas as acquisition due diligence, financing agreements, rent escalation clauses of leases, and partnership tax returns.
Moreover, improved pricing due to tight transportation supply and fuel surcharges combined with cost escalation clauses in multi-year customer contracts are driving revenue gains.
In addition, certain adjustments were identified since the initial filing of the 2003 Report on Form 10-K, the largest of which were (i) to correct the amortization for certain contract acquisition costs from three years to eight years, and (ii) to account for escalation clauses in certain of the Company's facility leases on a straight-line basis; each of which have carryover effects resulting in an increase to 2004 net income as discussed below.
Also of significance is the Conde Nast move out of about 145,665 square-feet at the nearby 360 Madison Avenue, where they are paying top dollar due to years of escalation clauses.
However, based upon the results of the ongoing investigation to date, with the exception of the accounting for escalation clauses in leases, all of the transactions that are currently expected to be the subject of this restatement were initiated more than 18 months ago.
Williams said that in the short-run, the company might only take contracts that have proper material escalation clauses or provisions for handling change orders in an expedited manner.
Approximately 85 percent of the in-place leases in the acquired portfolio have annual escalation clauses - one third of which have at least 4 percent annual escalations.
These additional adjustments are primarily due to a correction in accounting for free rent, concessions and escalation clauses in leases, and also includes smaller corrections primarily related to accounting for international acquisitions," Neve said.
Porter wages are the subject of many lease escalation clauses, with tenants paying "penny for penny" or "wage plus fringe" or other variations as increases in rent.