valuation clauses

Valuation clauses are provisions in contracts, often insurance policies or investment agreements, that specify how the value of a particular asset or interest will be determined if there's a disagreement or need for a valuation. They set the methods, standards, or formulas used to assess worth, ensuring clarity and fairness. For example, in life insurance, a valuation clause helps determine the payout amount if the policy’s value is challenged or needs to be calculated at a specific time. Overall, they provide a predetermined process for assessing value to avoid disputes later.