What it means
Define an observable event
A useful milestone identifies what must be delivered, who can accept it, the amount payable and the evidence required. A vague label such as “project progress” leaves room for conflicting interpretations.
Connect acceptance and payment
A project system should record the commercial acceptance separately from the transfer of funds. If payment is in cryptocurrency, the agreement also needs pricing and valuation rules. The date of a milestone invoice or payment does not automatically determine when accounting revenue is recognized.
Related concepts
In practice
A concrete example
A development contract makes a payment due after acceptance of a tested prototype and records the acceptance evidence alongside the invoice.
Technical notes & boundaries
The linked FAR provisions describe US federal procurement, not universal contract law. A milestone schedule is not automatically escrow or a revenue-recognition rule.
Go to the source.
Original references used for this definition. Product details and standards can change.