De-Escalation Clause

AAA

DEFINITION of 'De-Escalation Clause'

An article in a contract that calls for a price decrease if there is a decrease in certain costs. For example, a de-escalation clause may stipulate that maintenance fees will be reduced if the item being maintained depreciates in value. A de-escalation clause is the opposite of an escalation clause.

INVESTOPEDIA EXPLAINS 'De-Escalation Clause'

A de-escalation clause can protect consumers from paying inordinately high prices over the life of a contract that was signed during a time of unusual circumstances. For instance, shipping costs may be higher than normal when a contract is signed due to atypical prices on gasoline. A de-escalation clause will correct for that by lowering the contracted shipping rate as gasoline prices drop.

RELATED TERMS
  1. Disinflation

    A slowing in the rate of price inflation. Disinflation is used ...
  2. Inflation-Adjusted Return

    A measure of return that accounts for the return period's inflation ...
  3. Escalator Clause

    A contract provision allowing for one to pass an increase in ...
  4. Consumer Price Index - CPI

    A measure that examines the weighted average of prices of a basket ...
  5. Inflation-Indexed Security

    A security that guarantees a return higher than the rate of inflation ...
  6. Deflation

    A general decline in prices, often caused by a reduction in the ...
Related Articles
  1. Bonds & Fixed Income

    Curbing The Effects Of Inflation

    Your investments suffer when general price levels rise. Learn how you can control the damage with IPSs.
  2. Retirement

    All About Inflation

    What causes inflation? How does it affect your investments and standard of living? This tutorial has the answers.
  3. Watch for these signs that you or an elderly family member may need to downsize and move somewhere easier to manange. A senior move manager can help.
    Retirement

    Time To Hire A Senior Move Manager?

    Watch for these signs that you or an elderly family member may need to downsize and move somewhere easier to manange. A senior move manager can help.
  4. As Americans age – and families try to cope – the new field of senior move managers helps seniors relocate to safer homes with the least possible stress.
    Retirement

    A New Solution To Help Seniors Relocate

    As Americans age – and families try to cope – the new field of senior move managers helps seniors relocate to safer homes with the least possible stress.
  5. ISDA Master Agreement
    Investing Basics

    ISDA Master Agreement

    The ISDA Master Agreement is a document outlining the terms of an over-the-counter derivatives transaction between two parties. This document serves as a standard agreement in these transactions ...
  6. Budgeting

    4 Contract Essentials You Need to Know

    Over your lifetime, you’ll be asked to sign lots of contracts – perhaps agreeing to purchase a home, a car or to join a new gym or online dating service.
  7. Home Sale Contingencies: What Buyers And Sellers Need To Know
    Home & Auto

    Home Sale Contingencies: What Buyers And Sellers Need To Know

    Home sale contingencies protect buyers who want to sell one home before purchasing another. Find out what buyers and sellers need to know about these contractual conditions.
  8. Contingency Clauses In Home Purchase Contracts
    Home & Auto

    Contingency Clauses In Home Purchase Contracts

    Here, we introduce widely used contingency clauses in home purchase contracts and how they can benefit both Buyers and Sellers.
  9. Options & Futures

    Easy Ways To Cut Rental Costs

    If rent payments are crippling your finances, then read on to learn how to save your money.
  10. Investing

    What is an alienation clause?

    Whether used in reference to insurance policies, mortgages or commercial loans, an alienation clause stipulates that should a purchaser or borrower sell his or her interest to another party, ...

You May Also Like

Hot Definitions
  1. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  2. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  3. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  4. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  5. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  6. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
Trading Center