What is a De-Escalation Clause?
De-escalation clauses are provisions contained in contracts that address the issue of obtaining a decrease in the price of goods and services in the event that the costs to the provider are significantly decreased in some manner. The rationale behind the de-escalation clause is that if the provider of the goods and services does not have to utilize as many resources in order to service the general provisions of the contract, the client should realize a portion of that decrease. Essentially, the de-escalation clause provides the client with the right to ask for a price decrease even though a price or rate is specified in the contract, if it can be proven that the supplier is having to pay less to produce and deliver the product. The de-escalation clause is the opposite of an escalation clause. With an escalation clause, the vendor reserves the right to increase contracted pricing if it can be demonstrated that the costs associated with production and delivery increase beyond a certain p
