Tuesday, November 20, 2012

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[IWS] BLS: WRITING AN ESCALATION CONTRACT USING THE CONSUMER PRICE INDEX [16 November 2012]

IWS Documented News Service

_______________________________

Institute for Workplace Studies----------------- Professor Samuel B. Bacharach

School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies

Cornell University

16 East 34th Street, 4th floor---------------------- Stuart Basefsky

New York, NY 10016 -------------------------------Director, IWS News Bureau

________________________________________________________________________

 

Beyond the Numbers, November 2012, Vol. 1, no. 19

Prices & Spending

 

WRITING AN ESCALATION CONTRACT USING THE CONSUMER PRICE INDEX [16 November 2012]

http://www.bls.gov/opub/btn/volume-1/writing-an-escalation-contract-using-the-consumer-price-index.htm

or

http://www.bls.gov/opub/btn/volume-1/pdf/writing-an-escalation-contract-using-the-consumer-price-index.pdf

[full-text, 7 pages]

 

[excerpt]

Each year thousands of people write contracts with escalation clauses that are tied to the Consumer Price Index (CPI). Escalation contracts call for an increase in some type of payment in the event of an increase in prices. These contracts are used in a wide variety of ways, from adjusting rent prices to adding cost-of-living adjustments to alimony payments and wage contracts. Unfortunately, many escalation contracts tied to the CPI are vague. For example, a contract may stipulate that “the Consumer Price Index (CPI)” be used to escalate an apartment rent, but the Bureau of Labor Statistics (BLS) publishes thousands of CPIs each month, so a more carefully worded contract could minimize ambiguity and the likelihood of future disputes. This issue of Beyond the Numbers can help those who use the CPI to write escalation clauses to create a more comprehensive contract.

 

 

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This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.

 




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