Definition of Escalation clause:
Lending: Provision in loan agreements that permits a lender to raise interest rate if the market interest rates go over a certain ceiling, or if some contingency occurs (such as a fall in the borrowers credit rating). Also called escalator clause.
Construction: Provision in a contract for increasing or decreasing the contracted price for labor, material, etc., in step with the market prices or an agreed upon benchmark such as consumer price index (CPI).
Leasing: Provision in property lease agreements that allows a landlord to raise rent if the cost of maintaining or operating the building goes up.
Meaning of Escalation clause & Escalation clause Definition