Write the Microsoft Addendum Before NCE Writes It for You: Clause by Clause

The most common NCE question we hear from MSPs is not about pricing or migration tooling. It is "can someone just give me the contract language?" Liability remains the number one concern with New Commerce, and the licensing mechanics are different enough from everything else you sell that most MSPs will end up writing a Microsoft addendum to their managed service agreement rather than reworking the MSA itself.

A full boilerplate contract is not on offer here. What follows is the clause-by-clause checklist: the specific terms that should appear in your contracts, grouped the way NCE actually bites. One disclaimer first, stated plainly: we are not lawyers and have not consulted one for these recommendations. Evaluate them against how you will manage these contracts and consult a legal professional as needed.

The cancellation clauses: 72 hours and then the door closes#

This is the heart of NCE liability, so put it in writing first:

• A seat-based subscription of any term length can be cancelled, but only within the first 72 hours of the term.
• After those first 72 hours, no cancellation is possible. The customer continues to be billed for the remainder of the term and receives no refund for any unused portion of the committed term.
• Any decrements to the subscription must be made at subscription renewal.
• Increments made mid-term have their own 72-hour reversal window. Any increment reversed inside that window receives a prorated refund.
• Early termination requires full payment of the remainder of the term for all subscriptions.

The commitment clauses: terms, premiums, and seat changes#

• The customer may subscribe to Microsoft licenses on monthly, annual, or multi-year terms.
• Not all licenses offer monthly terms; the partner will advise the customer which licenses are available on which terms.
• Monthly term subscriptions in NCE are billed at a 20% premium over annual and multi-year terms of the same product type.
• The customer is committing to payment in full for all licenses included in monthly, annual, and multi-year subscriptions.
• Seat counts can be adjusted upward on any commitment term, but once more than 72 hours have elapsed since the order was placed or the subscription renewed, seat counts cannot be decreased until renewal.
• Seats added mid-month are prorated and co-terminate with the original renewal date.
• Monthly, annual, and multi-year subscriptions may be prorated on a monthly basis where appropriate or available.
• Mixing monthly and annual terms of the same product may result in different renewal dates based on purchase dates, and each newly purchased subscription may carry its own unique renewal date.
• Transfer of a customer subscription to another partner is not supported until the end of the subscription term.
• Applicable billing changes for new subscriptions or change requests appear on the next billing cycle.
• Decrements made at a monthly-commitment renewal that falls mid-month will not be reflected until the next billing cycle, and decrements made at renewal may produce a prorated credit on the next billing cycle.

The renewal clauses: notice periods and auto-renew#

• The partner will notify the customer X, X, and X days prior to an annual or multi-year renewal. (Set your own cadence; 30, 14, and 7 days is a common pattern.)
• The addendum automatically renews on an annual basis unless otherwise agreed by both parties.
• Monthly subscriptions automatically renew each month.
• The customer has 72 hours from a subscription's renewal date to make seat changes or cancel the renewal.
• Decrements made after the first of the month may not be reflected on the invoice until the next invoicing period.

The pricing clauses: locks and changes#

• Pricing from Microsoft is subject to change.
• Annual and multi-year commitments lock pricing for the duration of the term.
• Any increments made to annual or multi-year commitments capture the price lock of the original subscription purchase.
• Any pricing changes will be communicated before the automatic renewal of the addendum.

Watch the walkthrough#

A video walkthrough of these contract guidelines is available here: New Commerce contract guidelines video (opens in new tab).