Skip to content
Pactinel
Join the waitlist

Glossary

Indexation

Short answer

Indexation is the practice of linking a contract price or payment to a published index, most often a consumer price index such as CPI, HICP or RPI, so that it adjusts automatically over time. The clause must name the index, the base period, the calculation and the adjustment date.

By Pactinel editorial teamReviewed on October 22, 2026

An indexation clause replaces negotiation of each price change with a formula.

The formula

New price = old price × (index at the end of the period ÷ index at the start of the period)

Example

An annual fee of EUR 50,000 is indexed to HICP. The index was 120.0 in the base month and 124.2 twelve months later.

  • Change: 124.2 ÷ 120.0 = 1.035, so +3.5%.
  • New fee: EUR 50,000 × 1.035 = EUR 51,750.

What the clause must define

  1. Which index. Name the publisher, series and territory. See CPI, HICP, RPI.
  2. Base period. Which month's value is the starting point.
  3. Timing. Annually on the anniversary, or at another date.
  4. Rounding and publication. Decimals, and what happens if the index is delayed or discontinued.
  5. Limits. See cap and floor.

Practical risk

Indexation is rarely automatic in practice. Someone must look up the index, calculate the new price and check the supplier's invoice. Without that, overcharges and missed increases both go undetected.

This is general information, not legal advice.