No adjustment: Overview, definition and example
What does "no adjustment" mean?
"No adjustment" refers to a situation where no changes, modifications, or recalculations are made to a particular agreement, transaction, or financial arrangement. In contexts like contracts, pricing, or payments, a "no adjustment" clause indicates that the original terms or conditions will remain unchanged and that no alterations will be made based on certain factors (such as fluctuations in price, market conditions, or performance metrics). Essentially, it means that the agreed-upon terms will be upheld as originally stated without any modifications, even if circumstances change.
For example, a sales contract may include a "no adjustment" clause, which ensures that the agreed price will remain fixed, regardless of future changes in market conditions.
Why is "no adjustment" important?
"No adjustment" is important because it provides clarity and certainty for both parties involved in an agreement or transaction. By including a "no adjustment" clause, both parties agree that there will be no renegotiation, no changes to the agreed price or terms, and no re-evaluation of conditions. This can help reduce the risk of misunderstandings, disputes, or delays, particularly in long-term agreements or contracts.
For businesses, the "no adjustment" clause can offer stability, as it protects the original terms and prevents market volatility or other external factors from impacting the agreement. For individuals or clients, it provides assurance that the agreed-upon price or conditions will not unexpectedly change.
Understanding "no adjustment" through an example
Imagine a business that signs a fixed-price contract to supply goods over a year. The contract includes a "no adjustment" clause, meaning the price agreed upon at the start of the contract will remain unchanged throughout the year, regardless of any changes in the cost of raw materials or labor. This gives the business and its clients predictability and avoids future price increases.
In another example, a tenant might sign a lease with a "no adjustment" clause, ensuring that the rent remains the same for the entire lease term, regardless of market rent changes or fluctuations in the cost of living.
An example of a "no adjustment" clause
Here’s how a "no adjustment" clause might appear in a contract or agreement:
“The Parties agree that the price stipulated in this Agreement shall be fixed and final, with no adjustments to be made regardless of changes in market conditions, costs, or other external factors during the term of this Agreement.”
Conclusion
"No adjustment" is a contractual term that guarantees the original conditions, terms, or prices remain unchanged, regardless of any external circumstances. It provides stability and certainty for both parties, ensuring that neither side can alter the agreed terms based on fluctuating factors. Including a "no adjustment" clause helps prevent future disputes and maintains the integrity of the agreement as initially negotiated.
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.