{b}Dust off those old indexation clauses!{/b}
With the spectre of post-Brexit inflation looming, customers and suppliers alike will rediscover the importance of indexation clauses in IT service contracts. Perhaps even more neglected than a force majeure clause, and even less interesting, indexation clauses have received virtually no scrutiny in a world where inflation has been virtually zero. For every £1,000 of charges for services, the customer will pay back an additional £338 over 60 months assuming 6% inflation p.a. Inflation at this level is rarely factored into business cases and budgets, yet double digit price hikes for imported technology are just around the corner.
{b}John Yates runs consulting business v-lex, specialising in complex technology and outsourcing contracts. He is a Fellow and past Chair of SCL. John started his career with IBM.
