Should a contract outline a schedule for progress payments?

A contract should indeed outline a schedule for progress payments, especially in contexts such as construction, development projects, or any situation where the work is performed in stages. Establishing a clear payment schedule serves multiple purposes. It provides a framework for financial planning on both sides, ensuring that the recipient of the payments can manage cash flow effectively while also giving the payer assurance that payment is tied to specific milestones or completed work.

This clarity helps prevent disputes over payment timing and amounts, as it clearly defines when payments are due based on specific criteria. Additionally, a defined payment schedule increases accountability, as it links financial transactions directly to the progression of work. Such details can be critical in maintaining trust between parties and ensuring that both sides are aligned in their expectations throughout the project's lifespan. By formally outlining these terms in a contract, both parties have a reference point that facilitates communication and reduces the potential for misunderstandings.