Index Clauses In Contracts Allowed As Of 2013

On September 25th, the Finnish Ministry of Finance announced that the Act on Index Restrictions in Contracts (1195/2000) ("Act") will not be extended after December 31st 2012. The Act will thus still be applied to contracts which are concluded during 2012.

Generally, Finnish contract law follows the principle of nominalism whereby changes in the value of the currency between the contract and its enforcement or performance are not taken into account. This would call for separate index clauses where, following inflation, the nominal value of the contract would adjust automatically based on a contract clause or stipulation. However, previously under the Act, use of such index clauses has been denied due to their perceived negative impacts and effects on e.g. price stability and inflation. The Act has been in force since 1968. Some benefits and payments have nevertheless been tied to the index by legislation, e.g. pensions, maintenance allowances and lease agreements