VAR terms Clause Samples

The "VAR terms" clause defines the specific conditions and parameters related to a variable interest rate (often referred to as "variable annual rate") within a contract. It typically outlines how the interest rate may fluctuate over time, the reference index or benchmark used, and the frequency of rate adjustments. For example, it may specify that the rate is tied to LIBOR plus a margin and is reviewed quarterly. This clause ensures both parties understand how interest costs may change, providing transparency and managing the risk of rate volatility.