Legal Definitions - fluctuating clause

A fluctuating clause, also known as an escalator clause, is a provision in a contract that allows for the adjustment of the contract price based on changing market conditions. This means that the price can increase or decrease depending on factors such as taxes or operating costs.

For example, a construction contract may include an escalator clause that allows for the price to increase if the cost of materials or labor goes up. Similarly, a divorce agreement may include an escalator clause that automatically increases alimony payments if the obligor's salary increases.

In the oil and gas industry, a fluctuating clause may be included in a long-term gas contract to allow for adjustments to the base price of the gas as the market changes.

It's important to note that escalation clauses for child support are often unenforceable.

Overall, a fluctuating clause provides flexibility in contract pricing and allows for adjustments to be made based on changing circumstances.