de-escalation clause

de-escalation clause definition - finance
A section of a contract that requires prices to be lowered in the event that certain conditions are met. For example, if the price of raw materials that are used to fulfill the contract decreases, then the cost to the customer also decreases. This is in contrast to an escalation clause, in which prices can be raised in the event certain conditions are met.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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