Who owns the code you paid for
In most default contracts the answer is not you, and the clause that fixes it costs nothing to add before signing.
Unless the contract says otherwise in writing, the supplier that wrote the code usually owns it and you hold a licence to use it. Ownership should transfer to you on payment, and the agreement should say so in a clause you can find without a lawyer.
Ownership is three things, not one
People ask about the code and stop there. There are three separate assets in every build, and they can end up in three different places: the source code, the data your customers put into it, and the accounts the whole thing runs on.
A contract that transfers the code but leaves the hosting account and the domain registration in a supplier's name has transferred the least useful of the three. You own a car and somebody else keeps the keys.
What a default agreement says
Most supplier templates grant you a licence to use the software rather than title to it. That is not automatically unreasonable: a firm with a reusable component it has spent years on will not sign it away for one project fee.
It becomes unreasonable when the licence covers work that is specific to your business, written for your process, and useless to anyone else. That work is what you commissioned, and it should be yours.
The parts nobody thinks to claim
The argument is usually had about the application and lost on everything around it. Make the list explicit in the agreement rather than assuming it follows from the word code.
- Source code, including the history, not a zip file of the final state
- The domain registration, in your company name
- Hosting, database and email accounts, billed to you
- The data, plus a documented way to export it in a usable format
- Design files, and the licences for any fonts and images in use
- Third-party accounts opened on your behalf, with your billing details
How to fix it before signing
One clause: all intellectual property in work produced specifically for the client transfers to the client on payment of the relevant invoice. On payment matters, because it protects the supplier too and makes the clause easy to agree.
Then a second clause naming the exceptions. A supplier that reuses its own framework should say so, and grant you a perpetual licence to keep using it. That is a fair arrangement and it is only dangerous when it is undeclared.
When a supplier is right to say no
If a firm has built a scheduling engine used across many clients, asking for exclusive ownership of it as part of your project is asking for something you have not paid for. The correct ask is a licence that never expires and does not depend on the relationship continuing.
The test is not who wrote it. The test is whether the work exists because of your business. If it does, it is yours. If it existed before you called, buy the right to keep using it and move on.
What to take from this
- 01Silence in a contract usually means the supplier owns the code
- 02Code, data and accounts are three separate transfers, and the last one is forgotten most
- 03Transfer on payment protects both sides and is easy to get agreed
- 04Pre-existing components stay with the supplier: ask for a perpetual licence, not for ownership
Ask the question directly
- We already signed. Can this be fixed now?
- Often yes, and it is easiest at a renewal or at the start of the next phase, when both sides want something. Ask for the clause as part of the next statement of work rather than reopening the original agreement.
- Does open source in the project change anything?
- It changes what can be transferred. Open source components stay under their own licences, which is normal and fine. What transfers is the work written for you, and the agreement should list the components rather than pretend they are not there.
- Is access to the repository the same as ownership?
- No. Access can be revoked. Ownership survives the relationship, and the practical proof of it is that the account holding the repository is billed to your company.
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