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Acceptance Criteria Clause in UK Contracts: What It Means & Example Wording

An acceptance criteria clause defines the standards, tests, or conditions that deliverables must meet before they are formally accepted by the client. Once accepted, the client acknowledges that the deliverable conforms to the specification, typically triggering payment obligations and starting warranty periods. Acceptance criteria are critical in software development, construction, manufacturing, and any project-based contract where the quality and functionality of the output must be verified.

Last updated: February 2025

When to Include a Acceptance Criteria Clause

In software development and IT project agreements where deliverables must pass user acceptance testing (UAT) before go-live
In manufacturing and supply agreements where goods must meet technical specifications and quality standards
In construction contracts where practical completion must be certified before final payment is released

Example Wording

Upon delivery of each Deliverable, the Client shall carry out acceptance testing in accordance with the Acceptance Test Plan set out in Schedule [X]. The Client shall notify the Supplier within [10] business days of delivery whether the Deliverable passes or fails the acceptance tests, providing reasonable details of any failures. If the Deliverable fails acceptance testing, the Supplier shall correct the defects and resubmit the Deliverable for retesting within [10] business days. If the Deliverable fails acceptance testing [3] times, the Client may terminate this Agreement and receive a refund of fees paid in respect of the rejected Deliverable. If the Client fails to complete acceptance testing or notify the Supplier of any failures within the [10] business day period, the Deliverable shall be deemed accepted. Note: This is illustrative wording only and should be tailored by a qualified legal professional.

This example wording is illustrative only. Customise it to your specific circumstances and consider seeking legal advice.

Is a Acceptance Criteria Clause Enforceable in the UK?

Acceptance criteria clauses are enforceable as contractual terms. They provide objective standards against which performance is measured, reducing the risk of subjective disputes about quality. UK courts will uphold clearly defined acceptance criteria. The clause should specify: (a) what the acceptance tests are; (b) who performs them; (c) the timeframe for testing; (d) the process for reporting defects; (e) the number of permitted resubmissions; and (f) the consequences of repeated failure. Deemed acceptance provisions (where failure to respond within a timeframe constitutes acceptance) are also enforceable but must be fair and the timeframe must be reasonable.

Common Mistakes

Not defining the acceptance criteria in sufficient detail — vague standards like 'the software must work properly' are subjective and invite disputes
Failing to include a deemed acceptance provision — without one, the client can delay acceptance indefinitely, preventing the supplier from invoicing
Not specifying the consequences of repeated failure — without a clear exit mechanism, the project can remain in an endless cycle of testing and resubmission

FAQ

What happens if a deliverable is 'deemed accepted'?

Deemed acceptance means the deliverable is treated as if the client had formally accepted it, usually because the client failed to complete testing or notify the supplier of failures within the contractual timeframe. This triggers the same consequences as formal acceptance — payment becomes due and the warranty period starts. Deemed acceptance provisions incentivise timely testing.

Can acceptance criteria be changed after the contract is signed?

Only by formal agreement. Acceptance criteria form part of the contract, so any changes must follow the contract's variation procedure (usually requiring written agreement from both parties). Changes to scope or acceptance criteria should be handled through a change order process to ensure both parties agree on the impact on cost and timeline.

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This is guidance for UK businesses, not legal advice. Example wording is illustrative. Consult a solicitor for complex matters.

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