Understanding Annual Price Increase Contract Language
Contracts can be quite mundane in the day to day lives of families, whether it’s for insurance, car purchases, or handheld devices. However, understanding these contracts can be vital to a family’s financial health if that family is in the midst of a divorce, a separation, or a custody settlement. One important term to look out for in many regularly used contracts is comprehensive annual price increase contract language. This clause in a contract ensures that once a year, or every six months, or sometimes based on another schedule agreed upon by the parties, the fees increase based on some numerical amount or based on the inflation index. The importance of recognizing such language in a contract is vital to ensure that the family does not rely on the idea that a contract will not increase unexpectedly, and so that an individual can budget correctly, knowing that that particular expense may rise.
What is Annual Price Increase Contract Language?
Annual price increase contract language is simply the language that alerts the contracting party to the fact that the cost for the service may rise each year or bi-annually, or on some set schedule. Usually, the price increase is based on costs for inflation, or other reasons that are usually specified in the contract. This type of clause ensures that the business expenses will not run up to an unaffordable level unexpectedly, but it also has the possibility of being completely ignored, and the parties will just hope that the fee does not rise.
Why Annual Price Increase Contract Language is Important in a Family Situation
Annual price increase contract language is important in a family situation because many contracts come into play in a family’s life. For example, an HMO, or health maintenance organization, which is generally run through a big corporation, or through the family’s job, would include health insurance, which is a very important matter. Another example would be for products that have monthly or annual service fees, such as an online storage system that allows you to store family photos, or a subscription to a streaming service, such as Amazon Prime, or Netflix, or Hulu. These services come into play often in a family’s lifetime, and therefore, they can have a large impact on the family’s finances if the family is not made aware of the possibility that the usage may no longer be affordable as a result of the annual, semi-annual, or bi-annual fee increase.
The Implications if Annual Price Increase Contract Language is Disregarded
If a family looks at a contract, such as those mentioned above, and disregards the annual price increase contract language, the family may suffer expenses that are not accounted for in any of the budgets that they may have. Therefore, the family’s financial situation may change as a result of the increase. If the family had not been warned of the possible increase, then they could not have budgeted for any changes.
Examples of Common Contracts that Include Annual Price Increase Contract Language
There are many different types of contracts that might include annual price increase contract language. The HMO or health insurance is one of many examples. Other examples include cable bills, which can increase on an annual basis, or phone contracts, either for cell phones or for a landline, which can also increase on an annual basis. The use of any service for a car, such as XM radio, is another example of a commonly used service in a family’s life, which can increase on an annual basis.
How Recognizing Annual Price Increase Contract Language Can Help a Family’s Finances Post-Divorce
If a family recognizes that a contract contains annual price increase contract language, then they may be able to account for it in their budget, and account for it throughout the divorce as well. In this way, they can make sure that the expanse is going to be accounted for in an amount of time sufficient to save up for the increased costs.
How a Family Lawyer Can Help Recognize Annual Price Increase Contract Language
A family lawyer can examine all of the contracts a family may have, and alert the family to any possible annual price increase contract language. The family lawyer may also be able to advise them that they should negotiate the contract, or perhaps the contract should contain a provision that the annual price increase cannot exceed a certain percent or dollar amount for a specified period of time.
Examples of Cases Where Contract Language Made a Difference
Cases where contract language made a difference included those where a family had relied on the contractual language to keep the fees low. An example could be a situation where a family required a single insurance company, or a single HMO for insurance, and therefore, they relied on the contract language to ensure that the fees would not go up unexpectedly, or at an unexpected rate.
What to Do When Contract Renegotiations Come into Play During a Family Dispute
Make sure to review all of the terms of the contract, and consult with a family lawyer who will be able to advise whether or not the contract should be renegotiated or whether the contract can remain the same.
What to Do if Financial Resources Become Strained as a Result of a Contract
Consider renegotiating the contract, or scaling back on use of the services provided under the contract, in accordance with the contract language.
What Resources are Available for Families Under Financial Strain
Any consultation with a family lawyer can help to alleviate financial strains, as the lawyer will be able to advise at length the parties involved. Additionally, any consultation with a financial advisor may also be beneficial.
The Importance of Understanding the Language
In order to avoid future disputes, whether they be financial disputes, or litigation, understanding the legal language is important.