SaaS vendor changed ToS — can they raise prices mid-contract?

We signed an annual contract with a project management SaaS vendor last September. The contract locks in pricing for 12 months — or so I thought. Last week they emailed all customers saying they updated their Terms of Service and prices are going up 40% effective March 1st.

I looked at the original ToS we agreed to and there is a clause that says “We reserve the right to modify these Terms at any time. Continued use of the Service after changes constitutes acceptance.” Does this mean they can just raise prices whenever they want, even though we have an annual contract?

We have about 85 seats and the price hike would cost us an extra $18,000 per year. This is not trivial.

This is a common SaaS contract dispute and the answer depends on the specific language of your agreement. There are typically two documents in play: the Master Subscription Agreement (or Order Form) and the Terms of Service.

If your Order Form or MSA specifies a fixed price for a 12-month term, that is generally a binding commitment that the vendor cannot unilaterally modify. The ToS might govern feature changes, acceptable use, and general terms, but pricing in a signed order form usually controls over general ToS language.

The “we may modify at any time” clause is what is known as a unilateral modification clause. Courts have been increasingly skeptical of these, especially when they purport to allow material changes like a 40% price increase. In several jurisdictions, courts have held that such clauses are unconscionable or that they create an illusory contract (i.e., a contract where one party can change the terms at will is arguably not a real contract at all).

I would recommend: (1) review your Order Form and MSA separately from the ToS, (2) check whether the pricing language references the ToS or stands alone, and (3) send a formal written objection to the vendor stating that you do not accept the new pricing under your existing contract term. Do not just keep using the service silently, because the “continued use = acceptance” clause could work against you if you do not object.

I just pulled up the Order Form. It says “Annual subscription: $425/seat/year” and “Term: 12 months from Effective Date.” It also says “Subject to the Terms of Service at [URL].” Does the “subject to” language mean the ToS trumps the Order Form pricing?

“Subject to” is ambiguous, which actually works somewhat in your favor. When contract terms conflict, most jurisdictions apply the principle that the more specific term controls over the general term. Your Order Form with a specific price per seat per year is more specific than a general ToS provision saying they can change terms at any time.

Additionally, many SaaS contracts have an “order of precedence” clause that says in the event of a conflict, the Order Form controls. Check for that. If it is not there, the specificity argument is still strong.

Send that written objection as soon as possible. CC your account rep and their legal team if you have contacts. In my experience, most SaaS vendors will grandfather existing contracts through the current term and apply the new pricing at renewal. They are testing boundaries and will usually back down when a customer objects with legal specificity.

I work in procurement and deal with SaaS vendors constantly. This kind of mid-contract price hike attempt has become more common in 2024–2025 as SaaS companies face pressure to grow revenue. They count on most customers not reading the contract and just paying.

Send the objection letter and simultaneously start evaluating alternatives. Even if they back down for this term, they will hit you at renewal. Having a migration plan ready gives you negotiating leverage.

Also, look into data portability. Many SaaS contracts have provisions about exporting your data. If they do not, that is a red flag and you want to address it before renewal.

Had this happen with a CRM vendor. We pushed back with a polite but firm letter citing the contract terms and asking for written confirmation that our pricing was honored through the term. They responded within 48 hours confirming the original pricing.

The key is not being confrontational but being specific. Quote the exact clause, state the specific dollar amount, and ask for a written response. Vendors want to keep customers, especially 85-seat accounts. That is real revenue they do not want to lose.