What It Does
For in-house counsel, the acceptance process needs an owner who can complete testing and send any rejection before the deadline. A practical test: give the project lead the SOW and ask them to identify the pass criteria, testing window, required rejection notice, cure process, and payment milestone.
Defines acceptance criteria, often a test plan in the SOW
Sets a test or review period and a deemed-acceptance rule
Provides, when well-drafted, a reject-and-cure cycle and re-testing
Often ties a payment milestone to acceptance
Defines the remedies that remain available after acceptance, subject to the contract and applicable law
The deemed-acceptance window and the objectivity of the criteria determine when acceptance occurs and what the parties must show in a dispute.
When You'll See It
Acceptance clauses appear in software development and implementation agreements, system integration and hardware contracts, SaaS deployment statements of work, manufacturing and supply of goods, and construction and commissioning contracts. It lives in the deliverables or acceptance section, near payment milestones and warranties. For goods, it interacts with the buyer's right under the UCC to inspect and reject non-conforming goods, which the clause contractualizes; for software and systems, it usually runs off a test plan and an acceptance test.
It matters most where the customer is paying for something built or configured to a specification, and where defects are likely and consequential: a custom integration, a manufacturing line, a software build with milestone payments. The more the deliverable is bespoke and the larger the payment riding on it, the more the acceptance gate decides who holds leverage when it does not work.
Examples
CSG Systems, Inc. / Charter Communications Operating, LLC
Fifth Amendment to the Amended and Restated CSG Master Subscriber Management System Agreement
SaaS deliverable review and acceptance testing
One-Sided
2024
"Acceptance Testing. CSG will make available all Ascendon Software, Ascendon Documentation made available as a Deliverable and other Deliverables (each, a “Candidate Deliverable”) for review and/or acceptance testing by Customer (the date such Candidate Deliverable is received by or made available to Customer is referred to herein as the “Delivery Date”)."
Symbotic Inc. / Walmart
System Agreement
System testing against a test plan, then acceptance
One-Sided
2025
"Alpha System Testing and Acceptance. (a) Testing Criteria. Symbotic shall test each Alpha System installed at a Project Site in accordance with the test plan set forth in the Project SOW. (b) Production Testing. Testing of each Alpha System installed at a Project Site in a production environment will commence at the point at which the first case is available for pickup and delivery at a Walmart store from such Alpha System installed at the applicable Project Site."
Spirit Airlines, Inc. / IAE International Aero Engines AG
V2500 General Terms of Sale
Report non-conformance or be deemed to accept, with a right to reject
One-Sided
2024
"...will use reasonable efforts to resolve such non-conformance in a reasonable timeframe to be agreed by the Parties. If Spirit does not report a non-conformance within [redacted] of delivery, the relevant Spare Engine will be deemed to have been accepted. If IAE is unable to resolve such non-conformance within the agreed reasonable timeframe, then Spirit may reject such Spare Engine."
Negotiate
Seek enough time to test the deliverable and clear remedies when it misses the agreed criteria.
Require objective acceptance criteria tied to the specification, not "to Customer's satisfaction," so acceptance is testable rather than arguable.
Insist on a test period long enough to evaluate the deliverable, starting on actual delivery or availability for testing, and resist short deemed-acceptance windows. CSG's §3.4(a)(i), for example, distinguishes review periods for written and non-written deliverables after the applicable Delivery Date, unless the SOW provides otherwise; the durations are redacted in the filing.
Build in a reject-and-cure cycle with re-testing, tie a payment milestone to acceptance, and add a termination or refund right for repeated failures.
Seek fixed criteria, a defined review period, and a clear end to acceptance testing.
Define the acceptance criteria precisely in the SOW, so the target cannot move after delivery.
Include a reasonable deemed-acceptance backstop, so the customer cannot withhold acceptance indefinitely, and treat go-live or production use as acceptance.
Limit rejection to material nonconformities against the criteria, rather than any minor deviation.
The clause is a leverage gate, so the customer fights for objective criteria and a real cure right, and the vendor fights for a deemed-acceptance backstop and a fixed target.
Red Flags
A short deemed-acceptance window paired with vague criteria, so you accept a defective deliverable by inaction.
Subjective acceptance criteria such as "to Customer's satisfaction" with no objective specification.
No express reject-and-cure process, leaving the parties to determine the available remedies under the remaining contract terms and applicable law.
Payment not tied to acceptance, which removes your leverage over fixes.
Acceptance deemed on first use or go-live, before testing against the criteria is complete.
FAQs
This content is for informational purposes only and does not constitute legal advice.
