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I just completed the first milestone of a project, but before the client provides feedback and requests possible revisions, she decided to put the project on hold and pay me only half of first milestone fee under the pretext that no revision took place yet and source files weren't requested yet.

However I did spend all the time assigned to this first milestone and the work is pretty complete.

Should her excuse be rejected or does it indeed justify to not pay the fee in full?

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I guess she is wrong. Unless there is some provision about premature interruption in the contract, they did order the works and have to pay their duty, in the terms agreed upon.

In case they do not want the milestone to be performed at all, you are in a position to claim damages. I assume that if you can prove that you performed all the work (and couldn't expect a termination), the damages can cover 100% of the agreed price.

[Of course this all depends on the exact contract content and circumstances; as well as on the kind of relations you want to keep with them in the future.]

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No, that's total B.S.!

This sounds like a case of buyer's remorse. You contracted to get paid if you completed the work -- it's that simple. She is in breach of contract. As a matter of fact, it's a "constructive" breach because she's already told you that she's not going to hold up her end of the agreement. Technically, that's enough to get a civil lawsuit going. (I am not an attorney)

I had to share my understanding of this little fact with one of my clients who tried the same thing. I sent an email with the below definition, and said I'd give their office 24 hours to reconsider. That was at 9 am. By 4 pm, I got another call and was told there was a check in the mail. It was delivered the next day!

http://dictionary.thelaw.com/constructive-breach/

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