Milestone

Contracts & Legal

Definition

A defined checkpoint in a project or contract, often tied to a deliverable and a payment.

Explanation

Milestones break long engagements into verifiable stages, aligning payment with progress and reducing risk. Missing a milestone can trigger review, remediation or withheld payment.

Example

The build contract pays 25% at design sign-off, 50% at installation and 25% at acceptance — three milestones.

Related terms

Statement of Work (SOW) — A document defining the scope, deliverables, timeline and acceptance criteria for a services engagement.
Acceptance — The buyer's formal confirmation that delivered goods or services meet the agreed requirements, often triggering payment.
Progress Payment — A payment made in stages as work progresses, typically tied to milestones on a project or large order.
Service Level Agreement (SLA) — A contractual commitment defining the level of service a supplier must deliver, with measurable targets and consequences for missing them.

Frequently Asked Questions

What is Milestone?

A defined checkpoint in a project or contract, often tied to a deliverable and a payment. Milestones break long engagements into verifiable stages, aligning payment with progress and reducing risk. Missing a milestone can trigger review, remediation or withheld payment.

Can you give an example of Milestone?

The build contract pays 25% at design sign-off, 50% at installation and 25% at acceptance — three milestones.

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