Nancy from Austin. I struggle with explaining ratchet clauses in a way clients actually understand. The technical explanation is accurate but eyes glaze over. What simplified explanations are working for others?
How to explain ratchets to clients
Mike D from Raleigh. I use a hotel analogy. Imagine you rent a conference room for a year. Even if you only use it one weekend you still pay for the full year because you reserved the capacity. A ratchet works the same way.
Walt from Pittsburgh. I draw a bar chart on paper, 12 months of demand bars, then a flat line at 90 percent of the highest bar. Everything below that line is the ratchet floor. When clients see it visually it clicks immediately.
The visual approach is something I have not tried. Going to start carrying graph paper to client meetings.