Administration Contract
Escalation Clause Notice
Subject: Notification of Escalation Clause Activation
To: [Supplier Name]
From: [Your Name], [Your Position]
Date: [Insert Date]
Contract ID: [Insert Contract ID]
Dear [Supplier Contact Name],
In line with the terms outlined in our agreement (referenced above), we wish to inform you that due to a significant increase in raw material costs, as documented over the past [Insert Time Period], we are compelled to activate the escalation clause incorporated into our contract.
Clause Activation Details
Clause Reference: Section 5.2, "Price Adjustment for Raw Material Cost Increases"
Trigger Condition: An increase in raw material costs exceeding 10% over a [Insert Time Period] period.
Documented Increase: A 15% increase in raw material costs as verified by [Insert Verification Source] on [Insert Verification Date].
Adjustment Specifications
New Pricing Structure: As per the clause, this results in a 5% increase in the price of [Specify Product/Service].
Effective Date of Adjustment: [Insert Effective Date]
Duration of Adjustment: This adjustment will remain in effect until the next contract review date, scheduled for [Insert Review Date].
Implementation Steps
Please acknowledge the receipt of this notice and your understanding of the forthcoming adjustments. We will draft an amendment detailing these adjustments for both parties to review and sign. The new pricing will be applied to invoices issued after the effective date.
Conclusion
We regret any inconvenience this may cause but wish to emphasize that these adjustments are necessary to maintain the viability and sustainability of our supply chain in light of current market conditions. We value our partnership and are committed to navigating these challenges together.
Please contact us at [Your Company Number] to acknowledge receipt of this notice or to discuss any concerns you may have.
Thank you for your attention to this matter and your continued cooperation.
Sincerely,
[Your Name]
[Your Position]
[Your Company Number]
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