provision in a contract allowing cost increases to be passed on. In an employment contract, an escalator clause might call for wage increases to keep employee earnings in line with inflation. In a lease, an escalator clause could obligate the tenant to pay for increases in fuel or other costs.
provision in a contract allowing cost increases to be passed on. In an employment contract, an escalator clause might call for wage increases to keep employee earnings in line with inflation. In a lease, an escalator clause could obligate the tenant to pay for increases in fuel or other costs.
a provision in a lease that requires the tenant to pay more rent based on an increase in costs. Same as stop clause.
Example: A lease requires the tenant to pay increases in real estate taxes over the amount in the base year. Taxes were $1,000 for the base year and $1,250 for the following year. The tenant's rent is escalated by $250.
