Escalator Clause (Noun)
Meaning
A clause in a contract that provides for an increase or a decrease in wages or prices or benefits etc. depending on certain conditions (as a change in the cost of living index).
Classification
Nouns denoting communicative processes and contents.
Examples
- The union negotiated a contract with an escalator clause that would raise wages if the cost of living index exceeded a certain threshold.
- The vendor included an escalator clause in the contract that adjusted the price of goods based on fluctuations in the market.
- The employee's contract featured an escalator clause that provided for automatic raises as the company's profits increased.
- The government's contract with the contractor included an escalator clause that accounted for changes in the cost of materials and labor.
- The homeowner's insurance policy contained an escalator clause that increased premiums annually based on inflation rates.