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Contract Escalation

Consumer Price Indexes often are used to escalate or adjust payments for rents, wages, alimony, child support and other obligations that may be affected by changes in the cost of living. There is a web page explaining how to use the CPI for escalating contracts.

Producer Price Indexes can also be used in contract escalation. A web page explaining how to use PPIs for escalating contracts is available.

In addition, the Employment Cost Index (ECI) is increasingly being used by business organizations as an escalator to adjust long-term sales and purchasing contracts, and to adjust wage rates in collective bargaining agreements. There is a web page explaining how to use the ECI for escalating contracts.

 

Last Modified Date: July 27, 2006