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What does ESCALATION CLAUSE mean? ESCALATION CLAUSE meaning - ESCALATION CLAUSE definition - ESCALATION CLAUSE explanation. What is the meaning of ESCALATION CLAUSE? What is the definition of ESCALATION CLAUSE? What does ESCALATION CLAUSE stand for? What is ESCALATION CLAUSE meaning? What is ESCALATION CLAUSE definition?

Source: Wikipedia.org article, adapted under https://creativecommons.org/licenses/by-sa/3.0/ license.

An escalation clause is a clause in a lease or contract that guarantees a change in the agreement price once a particular factor beyond control of either party affecting the value has been determined. An important example of this is a contract that adjusts for inflation.

Escalation clauses are quite common in construction contracts to cover unexpected costs due to fluctuations in the prices for raw materials, fuel, and labor during the course of the construction project.