Escalator Clause Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Escalator Clause, written in plain English, along with examples of how it is used.

What is Escalator Clause?

n. a provision in a lease or other agreement in which rent, installment payments or alimony, for example, will increase from time to time when the cost of living index (or a similar gauge) goes up. Often there is a maximum amount of increase (“cap”) and seldom is there a provision for reduction if the cost of living goes down or for deflation instead of inflation.