diff --git a/docs/architecture/tech_stack.md b/docs/architecture/tech_stack.md
index d628f3d..0432578 100644
--- a/docs/architecture/tech_stack.md
+++ b/docs/architecture/tech_stack.md
@@ -114,3 +114,4 @@ Revisit this document if:
 - [`docs/decomposition/modules/contracts.md`](../decomposition/modules/contracts.md) — contract kinds (wire, content, telemetry), repo layout, versioning vs. register “Contract needed”
 - [`docs/decomposition/modules/client_server_authority.md`](../decomposition/modules/client_server_authority.md) — intents vs authoritative state; movement, camera, combat, economy ownership
 - [`docs/decomposition/modules/pvp_combat_integration.md`](../decomposition/modules/pvp_combat_integration.md) — E5.M1 combat engine × E6.M1 PvP eligibility (single pipeline, deny reasons)
+- [`docs/decomposition/modules/quest_scope_and_party.md`](../decomposition/modules/quest_scope_and_party.md) — quest state per character, party credit, turn-in, instance deferral
diff --git a/docs/decomposition/README.md b/docs/decomposition/README.md
index 217ca75..0ef09d6 100644
--- a/docs/decomposition/README.md
+++ b/docs/decomposition/README.md
@@ -9,7 +9,7 @@ This workspace contains detailed planning artifacts derived from the finalized m
 ## Folder Layout
 
 - `epics/` - One file per epic with implementation slices.
-- `modules/` - [Contract definitions](modules/contracts.md), [client vs server authority](modules/client_server_authority.md), [PvP × combat engine](modules/pvp_combat_integration.md), [full module dependency register](modules/module_dependency_register.md) (all epic modules), [per-module docs](modules/module_dependency_register.md#per-module-documentation), and interface notes.
+- `modules/` - [Contract definitions](modules/contracts.md), [client vs server authority](modules/client_server_authority.md), [PvP × combat engine](modules/pvp_combat_integration.md), [quest scope × party](modules/quest_scope_and_party.md), [full module dependency register](modules/module_dependency_register.md) (all epic modules), [per-module docs](modules/module_dependency_register.md#per-module-documentation), and interface notes.
 - `milestones/` - Phase-gated implementation tracks and pass/fail checklists.
 
 ## Working Rules
diff --git a/docs/decomposition/modules/E7_M1_QuestStateMachine.md b/docs/decomposition/modules/E7_M1_QuestStateMachine.md
index 6ba6e2b..5b9f225 100644
--- a/docs/decomposition/modules/E7_M1_QuestStateMachine.md
+++ b/docs/decomposition/modules/E7_M1_QuestStateMachine.md
@@ -13,9 +13,11 @@
 
 Data-driven quest lifecycle: start, step progression, branching, failure/reset, and completion with durable persistence. Integrates crafting and combat outcomes so guided content ties together gather–craft–combat loops without duplicate rewards.
 
+**Scope / party:** [Per-character state by default](quest_scope_and_party.md#persistence-per-character-by-default); optional [party credit and turn-in rules](quest_scope_and_party.md#quest-modes-content-driven) via `QuestDef` and [E8.M1](E8_M1_PartyAndMatchAssembly.md).
+
 ## Responsibilities
 
-- Load and interpret `QuestDef`; track `QuestStepState` per player (or party scope as designed).
+- Load and interpret `QuestDef`; track `QuestStepState` **per character**; synchronize party-credit advances per [quest_scope_and_party.md](quest_scope_and_party.md).
 - Apply `QuestStateTransition` rules for advance, abandon, fail, and complete.
 - Invoke or subscribe to [E3.M2](E3_M2_RefinementAndRecipeExecution.md) and [E5.M1](E5_M1_CombatRulesEngine.md) (or their events) for step completion predicates.
 
diff --git a/docs/decomposition/modules/E7_M2_RewardAndUnlockRouter.md b/docs/decomposition/modules/E7_M2_RewardAndUnlockRouter.md
index cf9660c..38cde7c 100644
--- a/docs/decomposition/modules/E7_M2_RewardAndUnlockRouter.md
+++ b/docs/decomposition/modules/E7_M2_RewardAndUnlockRouter.md
@@ -11,7 +11,7 @@
 
 ## Purpose
 
-Route quest and encounter outputs to XP, items, unlocks, and flags with **idempotent** delivery ([E7.M1](E7_M1_QuestStateMachine.md) completion, [E2.M2](E2_M2_XpAwardAndLevelEngine.md), [E3.M3](E3_M3_ItemizationAndInventorySchema.md)).
+Route quest and encounter outputs to XP, items, unlocks, and flags with **idempotent** delivery ([E7.M1](E7_M1_QuestStateMachine.md) completion, [E2.M2](E2_M2_XpAwardAndLevelEngine.md), [E3.M3](E3_M3_ItemizationAndInventorySchema.md)). **Party:** [Per-character idempotent grants](quest_scope_and_party.md#rewards-e7m2) when party credit completes multiple characters.
 
 ## Responsibilities
 
diff --git a/docs/decomposition/modules/E8_M1_PartyAndMatchAssembly.md b/docs/decomposition/modules/E8_M1_PartyAndMatchAssembly.md
index 814d0e6..ef50c14 100644
--- a/docs/decomposition/modules/E8_M1_PartyAndMatchAssembly.md
+++ b/docs/decomposition/modules/E8_M1_PartyAndMatchAssembly.md
@@ -33,6 +33,7 @@ Party creation, invites, ready-state, and party-scoped hooks for cooperative act
 
 - **E5.M4** — GroupCombatScaling.
 - **E8.M2** — GuildCorpProgressionState.
+- **E7.M1** — [QuestStateMachine](E7_M1_QuestStateMachine.md) when `QuestDef` uses party credit or leader-only turn-in ([quest scope](quest_scope_and_party.md)).
 
 ## Related implementation slices
 
diff --git a/docs/decomposition/modules/contracts.md b/docs/decomposition/modules/contracts.md
index b03bcf8..cc3f169 100644
--- a/docs/decomposition/modules/contracts.md
+++ b/docs/decomposition/modules/contracts.md
@@ -81,6 +81,7 @@ A module’s register **Status** can move to **Ready** when the contracts it **e
 - [tech stack](../../architecture/tech_stack.md) — Protobuf vs JSON spike, content validation, client/server split
 - [Client vs server authority](client_server_authority.md) — intents vs state, E1/E5 defaults, deferred networking choices
 - [PvP and the combat engine](pvp_combat_integration.md) — E5.M1 gating with E6.M1, deny reasons
+- [Quest scope and party rules](quest_scope_and_party.md) — per-character quest state, party credit, turn-in
 - [Module dependency register](module_dependency_register.md)
 - [Decomposition README](../README.md)
 
diff --git a/docs/decomposition/modules/module_dependency_register.md b/docs/decomposition/modules/module_dependency_register.md
index 6d566bd..5a06862 100644
--- a/docs/decomposition/modules/module_dependency_register.md
+++ b/docs/decomposition/modules/module_dependency_register.md
@@ -2,7 +2,7 @@
 
 Tracks cross-epic dependencies and contract readiness. Every **Depends On** module ID in this table has its own row (closed graph).
 
-**Contract** means a stable boundary with a defined artifact (Protobuf wire message, JSON Schema content file, telemetry catalog entry, or server-internal type until promoted). See **[What a contract is](contracts.md)** for kinds, repo layout, and versioning. **Authority** (who owns `PositionState`, camera, combat outcomes): **[Client vs server authority](client_server_authority.md)**. **PvP × combat:** **[PvP and the combat engine](pvp_combat_integration.md)**.
+**Contract** means a stable boundary with a defined artifact (Protobuf wire message, JSON Schema content file, telemetry catalog entry, or server-internal type until promoted). See **[What a contract is](contracts.md)** for kinds, repo layout, and versioning. **Authority** (who owns `PositionState`, camera, combat outcomes): **[Client vs server authority](client_server_authority.md)**. **PvP × combat:** **[PvP and the combat engine](pvp_combat_integration.md)**. **Quests × party:** **[Quest scope and party rules](quest_scope_and_party.md)**.
 
 Fleshed-out scope, contracts, and integration notes live in **per-module documents** (see [Per-module documentation](#per-module-documentation)).
 
@@ -69,6 +69,10 @@ Fleshed-out scope, contracts, and integration notes live in **per-module documen
 
 When hostile actions can target **players**, [E5.M1 — CombatRulesEngine](E5_M1_CombatRulesEngine.md) **must** consult [E6.M1 — PvPEligibilityAndFlagState](E6_M1_PvPEligibilityAndFlagState.md) in the same server handling path before applying effects. **PvE-only** milestones may use a **stub** that denies all player-target hostility until PvP is enabled. Shape and deny reasons: **[PvP and the combat engine](pvp_combat_integration.md)**.
 
+### Cross-cutting: quests and party
+
+Quest state is **per-character** by default; **party credit** and **leader-only turn-in** use [E8.M1 — PartyAndMatchAssembly](E8_M1_PartyAndMatchAssembly.md) when enabled in `QuestDef`. Solo milestones need no party service. Details: **[Quest scope and party rules](quest_scope_and_party.md)**.
+
 ### Epic 7 — Quest / Faction
 
 | Module ID | Module Name | Depends On | Contract Needed | Phase Required | Status |
diff --git a/docs/decomposition/modules/quest_scope_and_party.md b/docs/decomposition/modules/quest_scope_and_party.md
new file mode 100644
index 0000000..f3be842
--- /dev/null
+++ b/docs/decomposition/modules/quest_scope_and_party.md
@@ -0,0 +1,69 @@
+# Quest scope and party rules (#5)
+
+This doc fixes **solo vs party** quest behavior: where `QuestStepState` lives, who gets credit, who can turn in, and how open-world vs instanced scope is handled. It complements [E7.M1 — QuestStateMachine](E7_M1_QuestStateMachine.md), [E7.M2 — RewardAndUnlockRouter](E7_M2_RewardAndUnlockRouter.md), and [E8.M1 — PartyAndMatchAssembly](E8_M1_PartyAndMatchAssembly.md).
+
+---
+
+## Persistence: per-character by default
+
+- **Authoritative state** for a quest is stored **per character** (`QuestStepState` keyed by character / player id, plus quest id and any run id if replays exist).
+- There is **no** single shared “party quest row” in the prototype model; party play is expressed by **synchronizing advances** across multiple per-character states when content opts in (see below).
+
+**Rationale:** Avoids orphan state when members leave the party, keeps abandon/reset rules simple, and matches “classless solo-friendly” progression with optional co-op credit.
+
+---
+
+## Quest modes (content-driven)
+
+Express in **`QuestDef`** (or equivalent content) — exact field names are for the content schema when added:
+
+| Mode | Behavior |
+|------|----------|
+| **Solo (default)** | Objectives and completion use **only** the acting character. No read of [E8.M1](E8_M1_PartyAndMatchAssembly.md) `PartyState`. |
+| **Party credit** | When an objective completes, the server evaluates **eligible party members** and advances **each** eligible character’s `QuestStepState` **idem**potently (same step transition, no double-apply). Eligibility rules are data-driven, e.g. in zone, within distance of completer, alive, was in party when step started—minimum set TBD per quest in content. |
+| **Leader-only turn-in (optional)** | If set, only the **party leader** (per authoritative `PartyState`) may trigger the final hand-in / complete interaction; otherwise **any** character in completable state may turn in. |
+
+**Starting / accepting:** Each character **accepts** the quest individually unless content defines a rare “party accepts as one” flow (defer unless needed); prototype can require all intended recipients to accept the same quest id.
+
+---
+
+## Party dependency
+
+- **Party credit** and **leader-only turn-in** require server-authoritative **party membership** from [E8.M1 — PartyAndMatchAssembly](E8_M1_PartyAndMatchAssembly.md).
+- **Milestone ordering:** Solo quests ship without E8.M1. **Party-credit** quests are **gated** until E8.M1 (or a minimal stub that returns “solo only”) exists; document in slice plans.
+
+---
+
+## Rewards: E7.M2
+
+- After completion, **rewards are granted per character** with **idempotent** keys (e.g. `(character_id, quest_id, completion_epoch_or_counter)`).
+- If **party credit** advanced multiple characters to completion in one logical event, **each** receives their bundle per `QuestRewardBundle` rules (same bundle vs per-role bundles—content choice).
+
+---
+
+## Open world vs instances (prototype)
+
+- **Prototype default:** Objectives live in **shared zones** ([E4.M1](E4_M1_ZoneGraphAndTravelRules.md)); no separate quest instance id required.
+- **Instanced steps (later):** When dungeon / private instance exists, bind objectives to an **`instance_id`** (or shard key) so credit does not leak across instances. Wire when instance module and E4 handoff slices define the authoritative instance handle.
+
+---
+
+## Edge cases (explicit)
+
+- **Member leaves party mid-quest:** Per-character state **freezes** at last server-advanced step unless `QuestDef` defines abandon-on-leave. No implicit merge of two solo runs into one party run.
+- **Disband:** Same as leave for remaining members; leader-only turn-in re-evaluates on next `PartyState` update.
+
+---
+
+## Telemetry
+
+- Emit `quest_step_complete` / `quest_complete` **per character** credited; optional correlation id linking party-synchronized advances for funnel debugging.
+
+---
+
+## Related docs
+
+- [E7.M1 — QuestStateMachine](E7_M1_QuestStateMachine.md)
+- [E7.M2 — RewardAndUnlockRouter](E7_M2_RewardAndUnlockRouter.md)
+- [E8.M1 — PartyAndMatchAssembly](E8_M1_PartyAndMatchAssembly.md)
+- [Module dependency register — cross-cutting: quests and party](module_dependency_register.md#cross-cutting-quests-and-party)