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.
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.
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.
The cases cited by the majority to support its position that the tenant was not responsible for additional rent came from cases which stood only for the proposition that if the landlord seeks additional rent under a tax escalation clause such as found in this case, the amount of the additional rent is limited proportionately by the amount of increased tax actually paid, as opposed to merely an increase in the tax assessment over the base year.
Savvy owners can take advantage of this fact by adding appropriate language to tax escalation clauses in all future leases and renewals.
Porter wages are the subject of lease escalation clauses with tenants paying 'penny for penny' or 'wage plus fringe' or other variations as increases in rent.
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.