Contractindexering

Contractindexering, or contract indexing, is a contractual mechanism whereby certain obligations—most commonly prices, rents, or payments—are adjusted over time in line with a price index to maintain purchasing power and reflect changing costs. An indexing clause links the future payment amount to a specific index, such as the consumer price index (CPI), producer price index (PPI), or a cost-of-living index.

Typically, the mechanism requires a base index and base date, a defined adjustment frequency, and a calculation rule. The standard calculation uses a ratio: new payment = original payment × (index at the adjustment date / index at the base date). Some contracts apply caps or floors to prevent extreme changes, or use a blended index for volatility reduction.

Common applications include long-term leases, procurement and supply contracts, and other commercial agreements where costs are expected to vary with inflation. Public contracts and multiyear service agreements often employ indexing to preserve value across time. In employment-related terms, cost-of-living adjustments may be used for wage increases under certain collective agreements or statutory requirements.

Legal and practical considerations include: selecting an appropriate index, ensuring the clause is unambiguous, addressing data reliability and publication lags, and defining remedies for disputes. The use of indexing can improve predictability and reduce inflation risk, but adds complexity and potential misalignment between actual costs and indexed changes. In some jurisdictions, certain indices may be regulated or restricted, affecting enforceability.