Adjustment clause: Copy, customize, and use instantly
Introduction
An adjustment clause provides the conditions under which the terms of the agreement may be modified in response to specific changes or events. This clause ensures that both parties are protected in case of unforeseen circumstances that require alterations to the original terms. It is particularly useful in long-term agreements where certain elements, like price or timelines, may need to be adjusted based on external factors or performance metrics.
Below are templates for adjustment clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.
Price adjustment clause
This clause allows for adjustments to the price of goods or services based on certain factors, such as inflation or market conditions.
The price for [goods/services] under this Agreement shall be subject to adjustment based on changes in the [specified index, such as inflation, market conditions, or cost of raw materials]. If the price of [input materials or services] increases by [X]%, the price of [goods/services] will be adjusted by [Y]%.
Adjustment for changes in law clause
This clause provides for adjustments to the contract terms if new laws or regulations impact the performance of the agreement.
If any change in law, regulation, or government policy affects the ability of either party to perform its obligations under this Agreement, the parties agree to meet and negotiate in good faith to adjust the terms of this Agreement to ensure compliance with the new requirements.
Performance-based adjustment clause
This clause allows for adjustments based on the performance of one or both parties in meeting specific milestones or metrics.
The compensation under this Agreement may be adjusted based on the achievement of [performance metrics or milestones]. If [Party 1] achieves [X]% of the agreed performance targets, the agreed compensation will be adjusted upward by [Y]%, or downward by [Z]% if performance falls below [X]%.
Currency fluctuation adjustment clause
This clause allows for price adjustments in response to changes in currency exchange rates.
If the exchange rate between [currency 1] and [currency 2] fluctuates by more than [X]% during the term of this Agreement, the parties agree to adjust the pricing of [goods/services] to reflect the change in the exchange rate, ensuring that the value of the transaction remains equitable.
Volume-based adjustment clause
This clause allows for price adjustments based on changes in the volume of goods or services purchased.
The price of [goods/services] may be adjusted based on the volume of purchases made under this Agreement. If [Party 1] increases the purchase volume by [X]%, the unit price of [goods/services] will be reduced by [Y]% for all purchases above the agreed baseline volume.
Schedule adjustment clause
This clause allows for adjustments to the project timeline if certain conditions change or delays occur.
If [Party 1] experiences delays due to factors beyond their control, including but not limited to force majeure events, the schedule for delivery and performance under this Agreement may be adjusted. The parties shall mutually agree on an extended timeline for completion, not exceeding [X] months beyond the original deadline.
Cost adjustment clause
This clause allows for adjustments to the total cost of the project based on changes in underlying costs, such as labor or material costs.
The total cost of the project will be adjusted if the cost of [materials/labor/other specified costs] increases by more than [X]%. In such a case, the total project cost will be adjusted by [Y]% to reflect the increase in costs.
Tax adjustment clause
This clause allows for adjustments if there are changes in applicable taxes or tax rates.
If there is any change in the applicable tax rates or the introduction of new taxes that impact the cost of performing obligations under this Agreement, the parties agree to adjust the payment terms to account for the additional tax burden, ensuring that neither party bears the full impact of the tax change.
Market condition adjustment clause
This clause allows for adjustments based on changes in market conditions that affect the performance or pricing of the agreement.
If market conditions significantly change, resulting in a substantial increase or decrease in demand for [goods/services], the parties agree to renegotiate the terms of this Agreement, including but not limited to pricing and delivery schedules, to reflect the new market conditions.
Adjustment for unforeseen circumstances clause
This clause provides for adjustments in the event of unforeseen circumstances that significantly impact the ability to perform the agreement.
If unforeseen circumstances arise, such as [natural disasters, pandemics, or other specified events], that materially affect the ability of either party to perform their obligations under this Agreement, the parties agree to adjust the terms of this Agreement in good faith to account for the new circumstances.
Rate adjustment clause
This variation adjusts the rates based on inflation or market changes, ensuring that the price remains fair over time.
The rates for [goods/services] under this Agreement may be adjusted annually based on changes in the Consumer Price Index (CPI) or other relevant market indices. If the CPI increases by more than [X]%, the rates will be adjusted accordingly by [Y]% to reflect the change in market conditions.
Labor cost adjustment clause
This clause allows for an increase in the total cost of services if labor costs rise significantly, protecting the service provider from unexpected labor rate increases.
If the cost of labor, as reflected by the wages or hourly rates of employees directly involved in the performance of this Agreement, increases by more than [X]%, the total cost of the services provided will be adjusted upward by [Y]% to account for the increased labor costs.
Supply chain adjustment clause
This clause provides a mechanism to adjust prices in case of supply chain disruptions or increased costs, ensuring that both parties share the burden of such changes.
In the event that supply chain disruptions or increased supply costs cause delays or price increases, the parties agree to adjust the pricing of [goods/services] to reflect the increased costs resulting from these disruptions, as substantiated by [Party 1].
Adjustment for force majeure clause
This clause provides for performance adjustments if a party cannot fulfill its obligations due to force majeure events, ensuring that neither party is unfairly penalized for uncontrollable events.
If either party is unable to perform its obligations due to a force majeure event (such as natural disasters, strikes, or government actions), the performance deadlines and/or costs of performance will be adjusted to account for the impact of the force majeure event. The affected party will provide documentation substantiating the delay or cost increase.
Material cost adjustment clause
This clause allows for adjustments in the price of materials if their cost increases beyond a specified percentage during the agreement's term, protecting both parties from sudden price fluctuations.
The price of [specified materials] under this Agreement will be subject to adjustment if the cost of these materials increases by more than [X]% during the term of the Agreement. If such an increase occurs, the cost of materials will be adjusted accordingly, and both parties will be notified in writing.
Currency adjustment clause
This clause adjusts the payment terms if there are significant fluctuations in the exchange rate between two currencies, ensuring that the parties are not unfairly impacted by currency market changes.
If the value of [currency 1] fluctuates by more than [X]% relative to [currency 2] over a [specified time period], the total payment under this Agreement will be adjusted accordingly to reflect the currency exchange rate changes, ensuring neither party is unfairly impacted.
Project scope adjustment clause
This clause allows for price and schedule adjustments if additional work is required beyond the initial scope, ensuring that both parties are compensated for unforeseen requirements or changes.
If additional work is required beyond the scope initially agreed upon in this Agreement due to unforeseen requirements or changes in project specifications, the parties agree to adjust the project cost and schedule to reflect the new scope of work. [Party 1] will provide an updated proposal for the additional work to [Party 2].
Cost of living adjustment clause
This clause adjusts compensation based on the increase in the cost of living, ensuring that payments remain fair over time as inflation impacts living expenses.
If the cost of living increases by more than [X]% as measured by the [relevant index] during the term of this Agreement, the compensation paid to [Party 1] will be adjusted to reflect this increase. The adjustment will be made annually, beginning on the [X] anniversary of the Agreement.
Shipping and delivery cost adjustment clause
This clause allows for adjustments in shipping and delivery costs if external factors like fuel prices impact the delivery costs during the agreement.
In the event of increases in shipping or delivery costs due to changes in fuel prices or other transportation factors, the parties agree to adjust the costs associated with delivering [goods/services] under this Agreement. Any cost increases will be documented by [Party 1] and communicated to [Party 2] for approval.
Adjustment for governmental price controls clause
This clause ensures that if any government-imposed regulations impact the pricing of goods or services, both parties will adjust the pricing accordingly to comply with the new regulations.
If any government-imposed price controls or regulations are enacted that affect the pricing of [goods/services] under this Agreement, the parties agree to adjust the pricing structure in accordance with the new regulations, ensuring compliance with all applicable laws.
Volume-based discount adjustment clause
This clause allows for discounts if the order volume increases, providing cost savings when larger quantities are purchased.
If [Party 1] increases the order volume by [X]% compared to the original forecast, the price of [goods/services] will be adjusted downward by [Y]% for all units exceeding the original order quantity. Any volume discounts will be applied to the total value of the additional orders.
Performance adjustment clause
This clause adjusts compensation based on performance, rewarding [Party 1] for exceeding agreed-upon targets.
If [Party 1] meets or exceeds the performance targets outlined in [section of the Agreement], the payment terms may be adjusted to reflect the additional performance, with [Party 1] receiving [X]% more in compensation or additional benefits as specified.
Utility cost adjustment clause
This clause allows for price adjustments if utility costs rise during the term of the agreement, ensuring that both parties are not adversely affected by rising utility expenses.
If the cost of utilities (electricity, water, gas, etc.) increases by more than [X]% during the term of this Agreement, the affected party may adjust the pricing of services to account for the increased costs. The adjustment will be made based on documented utility cost increases.
Material shortages adjustment clause
This clause allows for price adjustments if material shortages lead to higher procurement costs, ensuring that the cost increase is fairly distributed between the parties.
If there is a shortage of critical materials needed to fulfill this Agreement, resulting in higher procurement costs, the pricing of [goods/services] will be adjusted accordingly. [Party 1] must notify [Party 2] in writing of any material shortages, along with substantiated proof of increased costs.
Performance-based fee adjustment clause
This clause allows for fee increases if performance targets are exceeded, incentivizing high performance by [Party 1].
If the performance of [Party 1] exceeds agreed-upon targets, as outlined in [performance metrics], the fees payable under this Agreement will be increased by [X]%, based on [Party 1]’s achievement of the specified metrics. The adjustment will occur at the end of each performance evaluation period.
Capacity utilization adjustment clause
This clause adjusts terms if either party needs to adjust its capacity due to demand changes, ensuring flexibility in performance and scheduling.
If either party is required to adjust its capacity utilization due to changes in demand, unexpected delays, or other factors affecting the performance of the Agreement, the terms of this Agreement, including cost and delivery schedules, may be adjusted to reflect the change in capacity requirements.
Risk factor adjustment clause
This clause accounts for increased risks from unforeseen events, adjusting costs or timelines to maintain fairness in the agreement.
In the event of increased risks due to unforeseen circumstances (such as geopolitical instability or natural disasters), the parties agree to adjust the costs or timelines of this Agreement to reflect the increased risk factor, ensuring both parties can meet their obligations in a reasonable manner.
Regulatory compliance adjustment clause
This clause allows for adjustments if changes in regulations impact either party's ability to perform under the agreement.
If changes in regulatory requirements affect the ability of either party to perform its obligations under this Agreement, the terms of this Agreement will be adjusted to accommodate such regulatory changes. The affected party will notify the other party within [X] days of the regulatory change.
Interest rate adjustment clause
This clause adjusts payment terms if the interest rate on financing changes, ensuring fairness in the contract if borrowing costs increase.
If the interest rate on financing required for the performance of this Agreement changes by more than [X]%, the payment terms will be adjusted to account for the increased cost of borrowing. This adjustment will be made based on the current interest rate applicable at the time of financing.
Supply cost index adjustment clause
This clause adjusts pricing based on changes in supply cost indices, helping both parties maintain fairness in light of fluctuating supply prices.
The cost of goods or services provided under this Agreement may be adjusted based on changes in the [specified supply cost index] over the course of the Agreement. If the index increases by more than [X]%, the pricing will be adjusted accordingly, and both parties will be notified.
Cost of raw materials adjustment clause
This clause ensures that the price of goods or services will reflect changes in raw material costs, maintaining fairness and transparency.
If the cost of raw materials used to fulfill this Agreement increases by more than [X]%, the parties agree to adjust the price of [goods/services] accordingly. The adjustment will reflect the increase in raw material costs and will be reviewed and approved by both parties.
Market price adjustment clause
This clause allows for price adjustments based on market conditions, ensuring that both parties are fairly compensated based on the current market realities.
If the market price for [specified product/service] increases or decreases by more than [X]% during the term of this Agreement, the parties agree to adjust the agreed price to reflect these market conditions, ensuring fairness in pricing based on current market realities.
Time extension due to regulatory changes clause
This clause extends the timeline if changes in regulations delay the project, ensuring that the deadlines are fair given the circumstances.
In the event that changes in regulations or legal requirements delay the performance of this Agreement, the parties agree to extend the timelines specified herein by the duration necessary to accommodate the changes, subject to the approval of both parties.
Adjustments based on exchange rate fluctuations clause
This clause accounts for exchange rate fluctuations between currencies, ensuring that neither party is unfairly impacted by currency market changes.
If the exchange rate between [currency 1] and [currency 2] fluctuates by more than [X]% during the performance of this Agreement, the parties agree to adjust the contract price to account for the change in exchange rates, ensuring no party is unfairly impacted by currency fluctuations.
Adjustment due to supply chain disruptions clause
This clause allows for pricing and timeline adjustments if supply chain disruptions impact the agreement, ensuring both parties can adapt to unforeseen challenges.
If disruptions in the supply chain cause delays or increased costs for the performance of this Agreement, the parties agree to adjust the pricing, timelines, and deliverables to reflect the impact of these disruptions. Documentation of the disruption must be provided to the other party.
Insurance cost adjustment clause
This clause ensures that increases in insurance costs are shared equitably, adjusting the overall project cost to reflect higher premiums.
If the cost of insurance related to the execution of this Agreement increases due to unforeseen circumstances or regulatory changes, the parties agree to adjust the overall costs to account for the increase in insurance premiums, with both parties agreeing on the new terms.
Delivery cost adjustment clause
This clause adjusts delivery costs due to external factors like fuel price increases, ensuring that both parties are aware of and agree to any cost increases.
In the event that delivery costs, such as transportation or shipping fees, increase by more than [X]% due to fuel price fluctuations or other external factors, the cost of delivering [goods/services] will be adjusted accordingly, with both parties notified in writing.
Performance threshold adjustment clause
This clause adjusts compensation or pricing based on whether performance targets are exceeded, ensuring that additional efforts are rewarded fairly.
If the performance metrics outlined in this Agreement are exceeded or not met, the parties agree to renegotiate the pricing or compensation structure, either increasing or decreasing the payment to reflect the achieved or missed targets.
Environmental impact adjustment clause
This clause adjusts the terms of the agreement if environmental factors or regulations change, ensuring fairness if environmental compliance costs rise.
If environmental regulations or other ecological factors increase the cost of performing obligations under this Agreement, the parties agree to adjust the terms of the Agreement, including but not limited to price, delivery schedules, and quality standards, to ensure compliance and fairness.
Personnel cost adjustment clause
This clause adjusts the pricing for services if personnel costs rise due to union agreements or labor changes, ensuring fairness in the contract.
If the labor costs related to the performance of this Agreement increase by more than [X]% due to changes in wages or union agreements, the parties agree to adjust the pricing of services or deliverables to reflect the increased personnel costs, subject to mutual agreement.
Contract term adjustment clause
This clause adjusts the length of the agreement if unforeseen changes in business conditions occur, ensuring the contract remains relevant.
If either party needs to extend or shorten the term of this Agreement due to unforeseen changes in business conditions, the parties agree to adjust the term based on the circumstances, with the duration and terms renegotiated accordingly.
Minimum purchase adjustment clause
This clause adjusts the minimum purchase requirement if external factors prevent the agreed-upon amount from being purchased, ensuring fairness in the contract.
If [Party 1] is unable to meet the minimum purchase requirements set forth in this Agreement due to external factors, the parties agree to adjust the minimum purchase threshold, with corresponding adjustments made to the pricing and delivery terms.
Licensing fees adjustment clause
This clause allows for price adjustments if licensing fees for intellectual property or technology increase, ensuring that the increased costs are shared fairly.
If licensing fees related to intellectual property or technology used in the execution of this Agreement increase by more than [X]%, the parties agree to adjust the compensation terms to reflect the new licensing costs, ensuring both parties share the financial impact equitably.
Contractor rate adjustment clause
This clause ensures that contractor rates are adjusted if there is a market-driven increase in subcontractor costs, maintaining fairness in pricing.
If the rates for contractors or subcontractors used in the fulfillment of this Agreement increase due to market conditions, the parties agree to adjust the overall project cost accordingly, with all adjustments documented and justified by both parties.
Adjustment due to unforeseen delays clause
This clause adjusts the contract terms if unforeseen delays occur, ensuring that both parties are able to adapt to the delay without unfair consequences.
If an unforeseen delay occurs due to reasons outside the control of either party, such as natural disasters, transportation breakdowns, or government actions, the parties agree to extend the timelines and adjust pricing to compensate for the delay.
Risk-based pricing adjustment clause
This clause adjusts pricing based on the perceived risks associated with the execution of the project, ensuring that both parties are fairly compensated for increased risk.
If the perceived risk of executing the project or services under this Agreement increases significantly due to unforeseen circumstances, the parties agree to adjust the pricing structure to reflect the higher level of risk, ensuring equitable distribution of risk.
Technology cost adjustment clause
This clause adjusts the pricing if the technology costs required to fulfill the contract increase, ensuring that both parties share the additional burden.
If the cost of the technology used in the performance of this Agreement increases due to new technological developments, licensing fees, or upgrades, the parties agree to adjust the terms of this Agreement, including pricing and deliverables, to account for the increased technology costs.
Inflation adjustment clause
This clause adjusts the pricing in the event of inflation, ensuring that the value of the contract remains aligned with the cost of living.
If inflation exceeds [X]% annually, the price for [goods/services] under this Agreement will be adjusted by the percentage increase in inflation, ensuring that the value of the Agreement remains consistent with market conditions.
Customs duties adjustment clause
This clause adjusts the pricing of goods or services if new customs duties or taxes are imposed, ensuring that both parties share the burden of increased duties.
If new customs duties or taxes are imposed on goods or services imported under this Agreement, the parties agree to adjust the pricing of the affected goods or services to reflect the increased cost, with both parties agreeing on the new terms.
Tax rate adjustment clause
This clause ensures that the contract price is adjusted to account for changes in tax rates, maintaining fairness and clarity for both parties.
If the applicable tax rates change during the term of this Agreement, resulting in an increase in the cost of performing any obligations, the parties agree to adjust the payment terms to account for the increased tax burden, with both parties agreeing to the new terms.
Supply price adjustment clause
This clause adjusts the pricing if there is an increase in the supply costs of goods or services, ensuring that the financial impact of such changes is shared.
If the price of key supplies or components needed to fulfill this Agreement increases by more than [X]% due to market conditions, the price of the [goods/services] will be adjusted to reflect the increase in supply costs, with prior written notice provided to both parties.
Interest rate adjustment clause
This clause adjusts payment terms if the interest rate on financing changes, ensuring fairness in the contract if borrowing costs increase.
If the interest rate on any financing related to the performance of this Agreement increases by more than [X]%, the terms of the Agreement, including payments, will be adjusted to reflect the new interest rate, ensuring that both parties are not adversely affected by the rate change.
Energy cost adjustment clause
This clause adjusts the pricing if energy costs increase, ensuring that the cost of delivering goods or services is fairly shared between the parties.
If the cost of energy required to perform obligations under this Agreement increases by more than [X]% due to changes in energy pricing, the parties agree to adjust the pricing of [goods/services] accordingly, to reflect the increase in energy costs.
Regulatory compliance adjustment clause
This clause allows for adjustments if changes in regulations impact either party's ability to perform under the agreement.
If new regulations or compliance requirements are enacted during the term of this Agreement, leading to increased costs or delays, the parties agree to adjust the contract terms, including pricing and timelines, to accommodate the changes in regulatory compliance.
Technology upgrade adjustment clause
This clause ensures that the costs associated with upgrading technology are fairly shared between the parties, adjusting the pricing as necessary.
In the event that the technology required for the fulfillment of this Agreement is upgraded or requires new versions, and such upgrades incur additional costs, the parties agree to adjust the pricing to cover the additional expenses incurred by [Party 1] for upgrading the technology.
Labor union cost adjustment clause
This clause adjusts the pricing if labor costs rise due to new union agreements, ensuring that both parties share the cost increases.
If the wages or benefits for labor involved in the execution of this Agreement increase due to union negotiations or collective bargaining agreements, the parties agree to adjust the compensation and costs accordingly to account for the wage increase.
Project complexity adjustment clause
This clause ensures that the pricing and schedule are adjusted if the project's complexity increases unexpectedly.
If the complexity of the project increases due to unforeseen circumstances or additional requirements, [Party 1] may request an adjustment to the project cost and schedule. Both parties agree to renegotiate the terms in good faith to reflect the additional complexity involved.
Supply demand fluctuation adjustment clause
This clause adjusts pricing if changes in supply and demand affect the cost of goods or services.
If there is an unexpected surge in demand for [goods/services] that affects the ability to perform the obligations under this Agreement, both parties agree to adjust the project timelines and pricing to accommodate the increased demand.
Logistical cost adjustment clause
This clause allows for adjustments in logistical costs if external factors impact transportation or shipping fees.
If the cost of logistics, including transportation and warehousing, increases due to unforeseen circumstances, the parties agree to adjust the delivery cost to reflect the increased logistical expenses, subject to mutual approval.
Government subsidies adjustment clause
This clause ensures that pricing is adjusted if government subsidies or incentives are reduced or withdrawn, ensuring fairness between the parties.
If government subsidies or incentives that were initially applicable to the performance of this Agreement are reduced or withdrawn, the parties agree to adjust the terms of the Agreement to account for the loss of subsidies, ensuring equitable distribution of the financial impact.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.