Price Variation Clause Calculator

Work out price variation clause instantly with clear inputs, formula shown and shareable results.

About Price Variation Clause Calculator

A price variation clause adjusts the contract price by the movement in a named index between the base date and the adjustment date, subject to a cap that limits the buyer's exposure. The cap also protects the supplier when the index falls, if it is symmetric.

Formulas

Index movement

Change % = (Current index / Base index - 1) x 100

Revised price

Revised = Original price x (1 + Applied variation), bounded by the cap

Worked example

With the default values below, Price Variation Clause Calculator returns Revised price of $6,952,284.26. Change any input above and every figure here is recalculated in your browser.

Inputs used

Original price: 6,400,000
Current index value: 128.4
Base index value at contract date: 118.2
Cap on price variation: 10

Results

Revised price: $6,952,284.26
Index movement: 8.629%
Variation applied after the cap: 8.629%
Cap status: Within the cap

Step by step

1Values used
2Index movement
3Revised price
4Revised price= 6,952,284.26
5Index movement= 8.629
6Variation applied after the cap= 8.629
7Cap status= Within the cap

Assumptions and limits

The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax, fees or charges or compounding frequency into account.
Figures are rounded for display to 3 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
Indicative estimate only. Fees, entitlements, limits and formulas vary by jurisdiction, statute, policy wording and the facts of the case. This is not legal, tax, insurance or financial advice — confirm with a qualified professional or the relevant authority.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Indicative estimate only. Fees, entitlements, limits and formulas vary by jurisdiction, statute, policy wording and the facts of the case. This is not legal, tax, insurance or financial advice — confirm with a qualified professional or the relevant authority.

Frequently Asked Questions

Should the cap be symmetric?

Symmetric caps are fairer and easier to agree. A one-way cap that only limits increases will be priced into the bid as a risk premium.

What if the index is discontinued?

The clause should nominate a successor index or a mechanism for agreeing one. Without it, the escalation provision can become unworkable.