Hoping for some advice.
We've found a venue that we want to go with and upon receiving their contract it has a term that effectively says they can increase the price in line with inflation in the 'unlikely' event that inflation goes above 5%. Whilst I understand this sort of term to be fairly common:
1. The venue is already increasing prices year on year which they have said is to tackle rising costs. We have booked for 2024 and the cost is £4k higher than 2022 costs as they are increasing price by £2k per year. This is equivalent to 15% increase per year roughly.
2. This term has no upper limit to how much we may be charged. As we are heading into a huge inflation spike over the next year or so, similar only to the 70s, these sort of terms could mean we have to shell out thousands more pounds
3. There is no stipulation of a cut off date to which prices can be increased, so effectively they could put he prices up by a few grand the day before our final payment is due and we wouldn't have much of a leg to stand on.
The lady dealing with us has said they have never had to increase costs, which is all good and well but we've had 3 decades of fairly consistent inflation below 5%, so such a term would have seemed low risk a few years ago. Now we currently have 10% inflation with predictions of it being higher again next year.
I have asked the venue if they are able to adjust this terms to add an upper cap / get out clause if costs go to a certain level, as well as stipulation regarding the latest date they can put up costs.
It bothers me that they are already increasing costs significantly and then building in a term that allows them to up the cost in line with the rate of inflation, which if this was 10% and 15% for the next 2 years would mean a potential huge increase in our costs if they decided to exercise that term.
I was wondering if anyone had experienced similar issues / concerns or if anyone had any advice?
Thanks a lotSteve
