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Construction Law
wherein the contractor must accept certain pricing fluctuations over a period of time before they could trigger a cost escalation right.
Regardless of the form, escalation clauses protect a contractor from taking massive losses that eat into profits and provide an opportunity for some level of “price insurance.” The question then becomes, what incentive does an owner have in agreeing to include such a clause?
Jacob J. Liro is a Shareholder with Wicker Smith in Miami, FL. Contact him at: jliro@wickersmith.com.
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FDCC ANNUAL FIVES 2023
