Contracts
Escalation clause
A clause raising a buyer’s offer automatically above competing offers
The offer states an increment, a ceiling and what proof of a competing offer the buyer requires before the escalation runs. It exists so a buyer can win a bidding contest without having to guess how high to open.
Easily confused with
In a lease the same phrase means something else entirely — rent rising with taxes or operating costs. Context decides which is meant.
How the exam asks about it
Price stays certain enough to be enforceable only because the ceiling and the increment are stated in advance. Read items for what triggers the escalation and what caps it.
Quick check: Escalation clause
One question. Pick an answer to see the explanation.
Which term is being defined: “A clause raising a buyer’s offer automatically above competing offers”?
Related terms
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