Fluctuating Clause Law and Legal Definition

Fluctuating clause is a provision usually included in contracts. It increases or decreases the contract price according to changing market conditions like higher or lower taxes or operating costs.

It can also be a provision in a divorce decree or divorce agreement providing for the automatic increase of alimony payments upon the occurrence of any triggering events, like cost-of-living increases or an increase in the obligor's salary.

In an oil and gas agreement it is a provision in a long-term gas contract which allows the base price of the gas to be adjusted as the market changes.

Fluctuating clause is also known as escalator clause.