escalator clause Hear it!

escalator clause definition - finance
A paragraph in a contract that sets the terms for regular price increases. Escalator clauses may be found in labor contracts. Such a clause also may be part of a long-term supply contract, in which case the clause provides for regular price increases to the seller or allows the seller to pass along increased prices of raw materials or goods.

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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