Constant Dollars Defined Clause Samples

The 'Constant Dollars Defined' clause establishes a method for adjusting monetary amounts in a contract to account for inflation or changes in purchasing power over time. Typically, it specifies a base year and an index, such as the Consumer Price Index, to ensure that all financial references remain consistent in real terms throughout the contract's duration. This clause helps maintain the economic value of payments or obligations, preventing erosion due to inflation and ensuring fairness for both parties.
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Constant Dollars Defined. As used in this Lease, “Constant Dollars” means the value of the U.S. dollar to which such phrase refers, as adjusted from time to time. An adjustment shall occur on the first (1st) day of January of the sixth (6th) full calendar year following the date of this Lease, and thereafter at five (5) year intervals. Constant Dollars shall be determined by multiplying the dollar amount to be adjusted by a fraction, the numerator of which is the Current Index Number and the denominator of which is the Base Index Number. The “Base Index Number” shall be the level of the Index for the calendar month during which this Declaration is recorded in the Official Records; the “Current Index Number” shall be the level of the Index for the calendar month that corresponds to the month of the date of this Lease of the year preceding the adjustment year; the “Index” shall be the Consumer Price Index for All Urban Consumers, published by the Bureau of Labor Statistics of the United States Department of Labor for U.S. City Average, All Items (1996=100), or any successor index thereto as hereinafter provided. If publication of the Index is discontinued, or if the basis of calculating the Index is materially changed, then Landlord shall substitute for the Index comparable statistics as computed by an agency of the United States Government or, if none, by a substantial and responsible periodical or publication of recognized authority most closely approximating the result which would have been achieved by the Index.
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