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Market conditions clause: Copy, customize, and use instantly

Introduction

A market conditions clause allows for adjustments in the agreement’s terms based on changes in market conditions, such as shifts in supply, demand, inflation, or economic factors. This clause ensures that both Parties are protected and that the agreement remains fair and reasonable in the face of significant market changes that could affect the performance or feasibility of the contract.

Below are templates for market conditions clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.

Standard market conditions clause

This version provides a general framework for market conditions.

The Parties agree that if there is a material change in market conditions that significantly impacts the ability of either Party to perform under this Agreement, both Parties shall meet within [X] days to negotiate an adjustment to the terms of this Agreement, including but not limited to price, timelines, or delivery terms.

Market conditions clause with provision for price adjustment

This version includes price adjustments based on market changes.

If the cost of raw materials or other essential goods required for the performance of this Agreement increases or decreases by [X]% due to changes in market conditions, the Parties agree to adjust the pricing terms accordingly to reflect the new market realities.

Market conditions clause with provision for renegotiation of terms

This version allows for renegotiation based on market conditions.

In the event of a substantial shift in market conditions, such as inflation, regulatory changes, or unforeseen economic factors, either Party may request a renegotiation of the terms of this Agreement. Both Parties agree to negotiate in good faith and adjust the terms where necessary to address the impacts of these changes.

Market conditions clause with provision for force majeure-like scenarios

This version treats certain market conditions like force majeure events.

If market conditions cause a significant disruption to either Party’s ability to perform under this Agreement, such as shortages of supply, drastic price fluctuations, or market volatility, the Parties agree to treat such conditions as force majeure events and may suspend or extend deadlines as necessary to mitigate the impact.

Market conditions clause with provision for economic downturn

This version applies to economic downturns.

If there is a significant economic downturn, defined as a [X]% decrease in GDP or a similar measurable economic indicator, either Party may request a temporary adjustment of the Agreement’s terms, including payment terms, delivery schedules, or performance expectations, based on the impact of the downturn.

Market conditions clause with provision for market-driven price fluctuations

This version applies to price fluctuations.

If there is an increase in the market price of [raw materials, goods, or services] by more than [X]% during the term of this Agreement, [Party A] reserves the right to adjust the contract price by a proportional amount to reflect the increase in costs. Similarly, any decrease in market prices will be reflected in a reduction of the contract price.

Market conditions clause with provision for review upon significant market shifts

This version includes a review upon significant market shifts.

In the event of a significant shift in market conditions, such as a market contraction or expansion, either Party may request a review of the Agreement’s terms. This review will occur within [X] days and may result in mutually agreed-upon adjustments to the scope of work, timelines, or payment schedules.

Market conditions clause with provision for supply chain disruptions

This version covers supply chain disruptions.

If there are significant disruptions to the supply chain that affect [Party B]’s ability to deliver goods or services on time, due to changes in market conditions, such as shortages, strikes, or international trade barriers, both Parties will agree to renegotiate the delivery terms or consider alternative solutions.

Market conditions clause with provision for price capping during volatility

This version includes a price cap during volatility.

In the event of extreme market volatility, defined as a [X]% fluctuation in the price of [key commodity], both Parties agree to implement a cap on the price increases under this Agreement, limiting any price adjustment to [X]% over the agreed rate.

Market conditions clause with provision for adjustments based on inflation

This version adjusts for inflation.

The Parties agree that if inflation, as measured by [specific index], exceeds [X]% over the course of the contract, the agreed prices for goods or services shall be adjusted accordingly to reflect the increase in the cost of living.

Market conditions clause with provision for early termination due to market collapse

This version allows for early termination due to market collapse.

If there is a collapse in the market, such as a [X]% drop in the value of [relevant index], either Party may terminate the Agreement with [X] days’ notice, without penalty, if the market collapse significantly hinders the ability to perform or meet obligations under this Agreement.

Market conditions clause with provision for currency fluctuations

This version covers currency fluctuations.

If there is a fluctuation in the exchange rate between [currency A] and [currency B] by more than [X]% within [X] days of the execution of this Agreement, the Parties agree to adjust the payment terms or total contract price to reflect the change in currency value.

Market conditions clause with provision for impact of government regulations

This version considers the impact of government regulations.

In the event that changes in government regulations, tariffs, or taxes result in increased costs or delays in the performance of this Agreement, both Parties agree to renegotiate terms in good faith to address these impacts and adjust the schedule, price, or scope accordingly.

Market conditions clause with provision for material supply shortages

This version addresses material supply shortages.

If a significant market condition leads to a shortage in the supply of critical materials or resources required for the execution of this Agreement, the Parties agree to renegotiate delivery timelines, payment terms, or substitute materials to mitigate the impact.

Market conditions clause with provision for price adjustments based on demand fluctuations

This version allows for adjustments based on demand fluctuations.

If there is a significant shift in market demand, such as an increase or decrease of [X]% in the demand for the goods or services provided under this Agreement, the Parties will adjust the pricing terms accordingly to reflect these changes.

Market conditions clause with provision for adjustment after market analysis

This version includes an adjustment after market analysis.

Both Parties agree that the prices and terms under this Agreement will be subject to review based on a market analysis conducted [X] months after the execution of the contract. If the analysis reveals significant changes in market conditions, the Parties will renegotiate key terms.

This version introduces risk-sharing during market shifts.

In the event of substantial changes in market conditions that impact the performance of either Party’s obligations under this Agreement, both Parties agree to share the risks of these changes. Adjustments will be made to payment terms or delivery schedules as mutually agreed.

Market conditions clause with provision for delayed performance due to market instability

This version allows for delays in performance due to market instability.

If market instability causes delays in performance, including supply chain interruptions or drastic price increases, the Parties agree to extend the performance deadlines by a period equal to the duration of the disruption, with no penalty.

This version introduces cost-sharing during market volatility.

In the event that market volatility causes significant cost increases in fulfilling this Agreement, such as a rise in material or labor costs, the Parties agree to share the additional costs equally, or as otherwise agreed in writing, based on the level of impact on each Party.

Market conditions clause with provision for adjustments due to market forecasts

This version includes adjustments based on market forecasts.

The Parties agree to periodically review market forecasts, which may indicate future changes in market conditions. If the forecast predicts a significant change, such as a [X]% drop in demand, the Parties agree to renegotiate key terms of the Agreement to mitigate anticipated impacts.

This version addresses market-related force majeure events.

If significant market conditions cause a force majeure-like event, such as a severe market downturn or unforeseen demand collapse, the Parties may invoke this clause to delay, suspend, or terminate obligations under this Agreement, without liability.

Market conditions clause with provision for regular market condition assessments

This version calls for regular assessments.

The Parties agree to conduct a market condition assessment every [X] months to determine if any changes in the market will require adjustments to the Agreement. If significant changes are identified, both Parties will negotiate in good faith to revise the terms as needed.

Market conditions clause with provision for long-term contract adjustments due to market shifts

This version applies to long-term contracts.

In the event that this Agreement spans a period longer than [X] months, either Party may request an adjustment to key terms, including pricing or delivery schedules, if market conditions change significantly over that time period, as assessed by both Parties.

Market conditions clause with provision for adjustments based on seasonal variations

This version addresses seasonal market fluctuations.

If market conditions fluctuate significantly due to seasonal demand changes, such as an increase in demand during the [X] season, the Parties agree to adjust the terms of delivery or pricing to accommodate these variations.

Market conditions clause with provision for pricing adjustments based on competitor pricing

This version allows for pricing adjustments based on competitor actions.

If competitors lower their prices for similar goods or services by more than [X]%, the Parties agree to renegotiate the pricing terms to remain competitive in the market and adjust the pricing accordingly.

Market conditions clause with provision for adjustment based on commodity price changes

This version applies to commodity price changes.

If the price of [specific commodity] increases or decreases by [X]% in the market, either Party may request a revision of the terms of this Agreement, particularly concerning the cost of materials, to account for the changes in commodity pricing.

Market conditions clause with provision for alternative performance methods in case of market shifts

This version offers alternative performance methods.

If market conditions cause delays or make the original performance methods infeasible, both Parties agree to explore alternative methods of performance that achieve the same results, with adjustments to the timeline or costs as necessary.

Market conditions clause with provision for suspension of obligations during significant market shifts

This version includes the suspension of obligations.

In the event of a significant market downturn or unexpected shift in market conditions, such as [specified scenario], either Party may suspend their obligations under this Agreement for a period of [X] days, during which both Parties will negotiate how to proceed.

Market conditions clause with provision for periodic market condition reviews

This version includes regular reviews of market conditions.

The Parties agree to conduct a review of prevailing market conditions every [X] months to assess the impact on the terms of this Agreement. If any significant changes are identified, both Parties will negotiate adjustments to reflect the new market realities.

Market conditions clause with provision for a price freeze in case of market instability

This version applies a price freeze during market instability.

If market conditions become unstable, as defined by [specified criteria], the Parties agree to freeze the current contract price for a period of [X] months, regardless of market fluctuations, to provide stability and predictability in pricing.

Market conditions clause with provision for performance delays due to economic factors

This version addresses economic factors causing delays.

If there is a significant economic shift, such as an increase in inflation or an economic recession, that affects the ability of either Party to meet performance deadlines, the Parties agree to extend the timeline by [X] months, as necessary.

Market conditions clause with provision for renegotiation due to geopolitical events

This version includes adjustments for geopolitical changes.

In the event of significant geopolitical events, such as trade restrictions, sanctions, or political instability, that disrupt the market or performance of this Agreement, the Parties agree to renegotiate key terms, including price or timelines, to account for the impact.

Market conditions clause with provision for risk mitigation due to volatility

This version focuses on risk mitigation.

Both Parties agree that in the case of high market volatility, particularly in the sectors of [specific sector], each Party will take reasonable steps to mitigate risks, including adjusting deliverables, payment terms, or adopting hedging strategies to manage the financial risks involved.

Market conditions clause with provision for interest rate adjustments due to market conditions

This version allows for interest rate adjustments.

If there is a significant change in interest rates as set by the Federal Reserve or other relevant financial institutions, the Parties agree to adjust the interest rate applied to any outstanding amounts under this Agreement accordingly, ensuring that the rate reflects current market conditions.

Market conditions clause with provision for adjustments based on supplier market changes

This version applies to supplier market conditions.

If there are significant changes in the market conditions affecting [Party B]’s suppliers, including supply shortages or price increases, [Party A] agrees to share the burden of these increased costs by adjusting the contract price accordingly, as mutually agreed.

Market conditions clause with provision for alternative dispute resolution based on market conditions

This version includes alternative dispute resolution mechanisms.

If a dispute arises regarding adjustments to the terms due to market conditions, both Parties agree to first attempt mediation or arbitration as the preferred method for resolving disputes before proceeding with litigation.

Market conditions clause with provision for a price reduction in case of favorable market conditions

This version includes a price reduction.

If market conditions improve significantly, such as a decrease in material costs or supply chain improvements, [Party A] agrees to reduce the contract price by [X]% to reflect the favorable changes in the market.

Market conditions clause with provision for termination rights in case of market collapse

This version allows termination in case of market collapse.

In the event of a complete market collapse, such as a [specified event], either Party may terminate this Agreement with [X] days’ notice. The termination will be without penalty, and any accrued obligations will be settled as of the termination date.

This version introduces cost-sharing mechanisms.

If market conditions cause an unexpected increase in the cost of materials or labor, both Parties agree to share the additional costs equally. Each Party will contribute [X]% of the increased costs until the market stabilizes.

Market conditions clause with provision for continued performance despite market disruption

This version allows continued performance despite disruption.

Despite any disruptions in market conditions, such as economic downturns or natural disasters, both Parties agree to continue performance under the Agreement, with the possibility of adjusting timelines or deliverables to mitigate the effects of market disruption.

Market conditions clause with provision for a market exit clause due to unmanageable conditions

This version allows for exit due to unmanageable market conditions.

If market conditions become unmanageable, causing one Party to be unable to fulfill their obligations, either Party may exit this Agreement by providing [X] days’ notice. This will be done without liability, and both Parties will work to ensure an orderly exit.

Market conditions clause with provision for adjusting delivery schedules based on demand fluctuations

This version allows for adjustments based on demand.

If demand for the products or services covered by this Agreement fluctuates significantly, the Parties agree to adjust delivery schedules to reflect the changes in market demand, ensuring that the Agreement remains feasible and realistic.

Market conditions clause with provision for renegotiation based on annual market forecasts

This version ties renegotiation to annual market forecasts.

Every year, both Parties will assess the market forecast and review potential adjustments to this Agreement. If the forecast predicts major shifts in market conditions, the Parties will renegotiate terms, including pricing or delivery schedules, to address these changes.

Market conditions clause with provision for market stabilization period

This version introduces a stabilization period.

In the event of significant fluctuations in market conditions, both Parties agree to enter a market stabilization period of [X] days, during which no changes to pricing, timelines, or performance expectations will be made unless mutually agreed.

Market conditions clause with provision for adjustments based on government-imposed price controls

This version addresses government-imposed price controls.

If the government imposes price controls or price freezes on the goods or services provided under this Agreement, both Parties agree to renegotiate the terms to reflect these regulatory changes, including potential adjustments to the agreed-upon price.

Market conditions clause with provision for trade regulation changes

This version accounts for changes in trade regulations.

If market conditions are significantly impacted by changes in trade regulations, tariffs, or international trade laws, the Parties agree to renegotiate the terms of this Agreement, including price adjustments or changes in the supply chain.

Market conditions clause with provision for adjustment based on unforeseen natural disasters

This version applies in case of natural disasters.

If unforeseen natural disasters, such as hurricanes, floods, or earthquakes, significantly affect market conditions and disrupt the Parties' ability to meet contractual obligations, the Parties agree to review and adjust the terms of this Agreement, including delivery schedules and costs.

Market conditions clause with provision for pricing based on future market predictions

This version incorporates future market predictions.

The Parties agree to base the pricing of goods or services under this Agreement on the predictions made by industry experts or financial analysts regarding future market conditions. If predictions indicate significant shifts, the Parties will renegotiate the price accordingly.

Market conditions clause with provision for joint review of market dynamics

This version includes a joint review process.

Every [X] months, both Parties agree to jointly review market dynamics and assess whether any changes in conditions, such as economic shifts or supply chain issues, necessitate an adjustment to the terms of the Agreement.

Market conditions clause with provision for renegotiation after market research

This version ties renegotiation to market research findings.

If new market research indicates that the conditions under which this Agreement was negotiated have significantly changed, either Party may request a renegotiation of the Agreement's terms, including pricing, timelines, or performance metrics.

Market conditions clause with provision for delay due to market-induced labor shortages

This version addresses labor shortages.

If labor shortages, driven by market conditions, impact either Party's ability to fulfill their obligations under this Agreement, both Parties agree to adjust delivery dates or timelines in a way that accounts for the disruption caused by these shortages.

Market conditions clause with provision for adjustments tied to commodity prices

This version ties adjustments to commodity prices.

If the cost of a key commodity required to perform this Agreement (such as [specific commodity]) increases by more than [X]%, the Parties agree to adjust the price of goods or services accordingly, based on the increase in the commodity price.

Market conditions clause with provision for periodic price recalculations based on index

This version uses an index for price recalculations.

The Parties agree that the prices under this Agreement will be recalculated every [X] months based on the [specified index], which reflects fluctuations in the market. Any significant changes in the index will trigger a proportional adjustment to the pricing.

Market conditions clause with provision for impact of inflation on pricing

This version accounts for inflationary impact.

If inflation, as measured by [specific index], exceeds [X]% over the course of this Agreement, the Parties agree to renegotiate the pricing terms to account for the increase in costs resulting from inflation.

Market conditions clause with provision for adjustment based on international market trends

This version incorporates international market trends.

If significant shifts in international market trends, such as global trade policies or international commodity prices, impact the cost of fulfilling this Agreement, both Parties agree to adjust the pricing or performance terms accordingly.

Market conditions clause with provision for change in market demand impacting performance

This version adjusts based on demand changes.

If market demand for the goods or services covered by this Agreement decreases significantly, as determined by [specified benchmark], the Parties agree to adjust the delivery timelines or performance expectations to reflect the lower demand.

Market conditions clause with provision for adjusting contract terms in response to competitor actions

This version considers competitor actions.

If a competitor introduces a significant pricing change or market innovation that affects the competitiveness of the goods or services provided under this Agreement, the Parties agree to renegotiate the terms to maintain competitive advantage.

Market conditions clause with provision for fluctuation in regulatory environment

This version incorporates regulatory changes.

If market conditions are impacted by changes in regulatory requirements, including new laws or regulations that affect the cost of goods, services, or operations, the Parties agree to adjust the terms of the Agreement to reflect these changes.

Market conditions clause with provision for delay in performance due to raw material shortages

This version allows for performance delays due to shortages.

If a shortage in raw materials due to market conditions significantly impacts either Party’s ability to fulfill its obligations, the Parties agree to extend the performance deadlines and adjust delivery schedules accordingly.

Market conditions clause with provision for temporary suspension due to economic crisis

This version includes temporary suspension during crises.

If an economic crisis, such as a financial crash or hyperinflation, occurs, the Parties agree to temporarily suspend the obligations under this Agreement for a period of [X] months, allowing both Parties to reassess the impact and renegotiate terms as necessary.

Market conditions clause with provision for performance adjustment based on market volatility

This version allows for performance adjustments during volatility.

If the market experiences high volatility, defined as [X]% fluctuation in the relevant market indicator over [specified period], both Parties agree to adjust performance expectations, timelines, and pricing to reflect the uncertainty and increased risk.

Market conditions clause with provision for financial support in case of severe market disruptions

This version includes financial support provisions.

If severe market disruptions cause financial strain on either Party’s ability to perform under this Agreement, both Parties agree to provide mutual financial support, including loans or extended payment terms, until market conditions stabilize.

This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.

Last updated 12 Mar 2025