Without this clause, vendors can increase prices by any amount at the end of a term. A negotiated cap—typically between 3% and 5%—ensures long-term budget predictability.
While most contracts naturally include "true-up" clauses (allowing vendors to charge for overages), a "true-down" clause allows you to reduce license counts or tiers based on actual lower usage, preventing payment for "shelfware". key contract clauses enterprise software licensing renewal
Start renewal discussions at least prior to expiration. 5. Negotiate Without this clause, vendors can increase prices by