When Conflict Raises Costs: Do Price Adjustment Clauses Work?, Lexology PRO

Lexology PRO spoke with partner Barbara Murphy Melby about the role of price adjustment clauses in helping companies manage supply chain and cost volatility arising from geopolitical conflicts, including disruptions linked to escalating tensions in the Middle East.

Barbara explained that while price adjustment clauses can provide valuable flexibility and certainty in long-term commercial agreements, they are most effective when used as part of a broader contractual risk-allocation framework. She noted that companies should evaluate these provisions alongside other protections that address operational disruptions and performance risks. As Barbara observed, “As we saw during the pandemic, disruption often goes beyond pricing, which is why companies also are paying closer attention to related provisions that may impact delivery commitments, such as force majeure, hardship clauses, changes in law or sanctions, and prioritization and termination rights.”

Read the full Lexology PRO article >>
Subscription may be required.