Price escalation clause

A price escalation clause is a capital preservation clause , for payment terms with which z. B. the supplier reserves the right to adjust the price of goods in the event of an increase in cost (performance retention clause or cost element clause).

General

Similar to alloy surcharges , the influence of the price volatility of a part of the components agreed in the scope of delivery is compensated by the fact that permitted price changes are also reflected in the remuneration. This is often agreed when the contract term extends over a longer period of time and it is to be expected that the costs of manufacturing the product can fluctuate significantly, for example in the case of construction projects.

A specific distinction is made between the material price sliding clause and the wage price sliding clause . In the case of material price escalation clauses, the price changes due to changing raw material prices (e.g. steel, cement, sand, etc.) and in the case of wage price escalation clauses due to changed personnel costs .

General price escalation clause

So-called unit prices or flat-rate prices are usually agreed for certain works as remuneration . In both cases, significant changes in costs can be borne by, but also in favor of, the contractor. In this respect, the contractor bears the cost risk. The contractor can pass this cost risk on to the client (or entrepreneur) by means of a material price escalation clause. The possible price increase is therefore often determined between contractual partners by means of a price escalation formula. The general price escalation formula is: Legend: ${\displaystyle P_{1}=P_{0}*\left(a+b*{\frac {M_{1}}{M_{0}}}+c*{\frac {L_{1}}{L_{0}}}\right)}$

${\displaystyle P_{1}}$: Price on the day of delivery : Price on the day the contract is concluded : Material costs on the day of delivery : Material costs on the day the contract is concluded / a fixed price base day: Labor costs on the day of delivery : Wage costs on the day the contract is concluded / a fixed price base day a : percentage of the price which remains unchanged b : percentage of the price that is attributable to material c : percentage of the price that is attributable to wage costs
${\displaystyle P_{0}}$
${\displaystyle M_{1}}$
${\displaystyle M_{0}}$
${\displaystyle L_{1}}$
${\displaystyle L_{0}}$

The material cost item can be split up into several items, since different raw materials flow into the product to different degrees and can be affected by price increases to different degrees.

Regulations

Since escalation clauses can act lower inflation rate, in Germany in principle the use of escalation clauses prohibited ( § 1 law prohibiting the use of price clauses in the determination of monetary obligations, so-called. Price clause law ). The law provides for certain exceptions to this in § § 2 ff. PrkG, which can be regulated in different ways. Price escalation clauses are often used in commercial rental agreements.

The Federal Office for Building and Regional Planning regulates the prices for various materials through decrees that apply to the building administrations of the federal states, such as steel. The validity of these edicts is limited and will be extended depending on the price development. The Federal Ministry of Transport, Building and Urban Development specifies the use of material price escalation clauses in the procurement and contract manual for construction services (VHB Bund) with forms and factual regulations.

Price escalation clauses in Austria and Switzerland

The term price escalation clause is not used in Austria . There one speaks of "variable prices", which according to §2 section 26 lit. g BVergG and according to section 3.16.7 ÖNORM A 2050 (2006) are defined as "the price that can be changed under certain conditions if the agreed principles are changed". In Switzerland , the price adjustment is regulated according to the SIA 118 "General Conditions for Construction Work" (comparable to the German VOB).

Individual evidence

1. ↑ Value protection clauses / price escalation clauses. (No longer available online.) Destatis.de , archived from the original on November 14, 2014 ; accessed on April 5, 2019 . 
2. ↑ ^{a b} Material price escalation clause . At bauprofessor.de, accessed on October 23, 2015
3. ↑ Price Clause Act - Drafting price clauses in contracts . At ihk-schleswig-holstein.de, accessed on April 5, 2019
4. ^ Kai-Jochen Neuhaus: Index clauses in commercial rental contracts - core problems of the new price clause law. ( PDF ) (No longer available online.) Mdr.ovs.de, 2010, formerly in the original ; accessed on April 5, 2019 (available from the website of the "monthly for German law - MDR").  ( Page no longer available , search in web archives )  
5. ^ Günther Hoffmann: Subject: Material price sliding clause l for steel in construction contracts. ( PDF ) (No longer available online.) Bmvi.de, December 2, 2010, archived from the original on December 8, 2015 ; Retrieved on April 5, 2019 (decree of the Federal Office for Building and Regional Planning in a letter to the building administrations of the federal states).  
6. ↑ ^{a b c} Patrick Altmüller (2012) Development of a differentiated price escalation clause for functional construction contracts in road construction ; Kassel University Press GmbH; ISBN 386219308X ; Page 97 ff .; on Google Books.

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