An automatic-adjustment clause allows service-providing companies, such as those in the electricity or gas industry, to increase their prices without seeking government approval if specific costs rise. For instance, if the cost of fuel increases, the company can adjust its prices without undergoing a lengthy permission-seeking process. This rule aims to assist companies in managing their expenses and ensuring the continued provision of their services.
An automatic-adjustment clause in a utility-rate schedule enables a public utility to raise its rates without the need for a public hearing or state review, in the event of certain operating costs, such as fuel prices, increasing. For instance, if a utility company has an automatic-adjustment clause in its rate schedule, it can raise its rates automatically if the price of fuel rises, without the requirement of a public hearing or state review. This allows the company to swiftly and efficiently adjust its rates to cover the increased costs. Another example could be a water utility company that includes an automatic-adjustment clause in its rate schedule. If the cost of chemicals used for water treatment increases, the company can automatically raise its rates to account for the additional expense. Overall, an automatic-adjustment clause permits utility companies to modify their rates in response to fluctuating operating costs, without undergoing a lengthy and potentially expensive review process.
An automatic-adjustment clause is a provision in a contract that allows for the adjustment of certain terms or conditions based on specific factors or events without the need for further negotiation or agreement between the parties.
Automatic-adjustment clauses are commonly found in contracts related to leases, loans, insurance policies, and employment agreements.
The triggering factors or events can vary depending on the specific contract, but common examples include changes in interest rates, inflation rates, cost of living indexes, or market conditions.
Yes, both parties can benefit from an automatic-adjustment clause as it provides a mechanism for adjusting terms or conditions in response to changing circumstances, ensuring fairness and preventing disputes.
Yes, the parties can agree to modify or remove an automatic-adjustment clause through mutual consent. However, it is important to review the contract terms and consult with legal counsel to ensure compliance with any applicable laws or regulations.
Yes, there may be limitations or restrictions imposed by law or regulatory authorities on the use of automatic-adjustment clauses. It is crucial to consult with legal professionals to ensure compliance with all relevant legal requirements.
Yes, an automatic-adjustment clause can be challenged in court if one party believes it is unfair, unconscionable, or in violation of any applicable laws or regulations. The outcome will depend on the specific circumstances and the interpretation of the contract terms.
If an automatic-adjustment clause was not properly disclosed or explained to the other party, it may be deemed unenforceable. Full and clear disclosure of all contract terms is essential for their enforceability.
Yes, other provisions in the contract, such as a specific provision addressing a particular circumstance, may override or modify the automatic-adjustment clause. It is important to carefully review the entire contract to understand the interplay between different provisions.
While automatic-adjustment clauses can be included in various types of contracts, their appropriateness and enforceability may vary depending on the specific circumstances and legal requirements. It is advisable to seek legal advice when considering the inclusion of an automatic-adjustment clause in a contract.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
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