A price escalation clause is a contract term that adjusts the contract price when the cost of materials, labour or fuel rises or falls beyond an agreed limit during the contract period, usually by reference to published price indices.
Without one, a fixed-price contractor carries the risk of rising costs, which matters on long projects. With one, the contract states which inputs are covered, the base date, how the change is measured and when it applies.
Many contracts exclude the first stretch of the contract period or limit escalation to a share of the contract value. The clause as written is what counts, so read it before bidding.
Keeping a record of the rates paid month by month gives the evidence needed to support an escalation claim.
Every vendor bill and wage entry keeps its date and rate, with a change history for each ledger entry, which gives you the record to support a claim. See all features.
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