What is a price indexation clause under Dutch law?

Dutch term: Prijsindexatieclausule | Legal basis: Freedom of contract

A price indexation clause (prijsindexatieclausule) under Dutch law is a contractual provision that adjusts the price periodically based on a defined index, typically the CBS (Statistics Netherlands) consumer price index or producer price index. Indexation clauses are governed by freedom of contract and are common in long-term supply, distribution and lease agreements.

The clause should specify the reference index, the base period, the adjustment formula, the frequency of adjustment, notification requirements, and any cap or floor on the adjustment. For international contracts, the choice of index (Dutch CPI, Eurostat HICP, or another national index) and the currency of the price adjustment require explicit agreement.

Why it matters for international businesses

For long-term supply chain contracts, price indexation provides a mechanism for absorbing cost changes without renegotiation. In periods of high inflation, a well-drafted indexation clause can prevent margin erosion on one side or excessive cost increases on the other.