Where a contract allows the supplier to stipulate price increases in line with a specified index, this is called which of the following?
A)Escalator clause
B)Price inflation
C)Wage inflation
D)Price parity

Question

Quizplus · Accepted Answer

The scenario described is an example of an escalator clause, which allows for price increases based on a specific index or measure. This is a common practice in many contracts, particularly in industries where prices are subject to volatility or fluctuations in the market. Price inflation and wage inflation may be factors that affect the index used in the escalator clause, but they are not the specific term for the clause itself. Price parity refers to the concept of equal pricing or pricing that is in line with market norms, but it is not directly related to the use of an escalator clause.

Where a Contract Allows the Supplier to Stipulate Price Increases