- Rights to code pass to you only when the contract expressly says so.
- Authorship can't be transferred, and that's fine. What matters are the property rights.
- Sign acceptance certificates: they record exactly what was handed over and when.
You paid for the product. But legally it may still belong to whoever wrote it. Here's what a contract needs for the code to be yours.
Why this is a problem at all
By default, the rights to a work, including software code, arise with whoever created it. If the contract is silent on transferring rights, you may have the code on your server but no right to dispose of it: sell it, license it, show it to an investor as a company asset.
Most often this surfaces during due diligence before an investment, when the investor asks you to show that all the intellectual property belongs to the company. And it turns out half the code was written by contractors under “services” agreements without a single word about rights.
The rights transfer clause
The key thing a contract must have is an assignment of intellectual property rights to the work product. Put simply: a transfer of rights to what was created. Code, design, texts, documentation.
It's worth stating which rights are transferred, from what moment (for example, from the date the acceptance certificate is signed) and for what territory. The wording “all property rights in full” is better than a list in which something can be left out.
Personal non-property rights, such as the right to be named as the author, can't be assigned under Ukrainian law. That's fine: what matters for a business are the property rights.
Acceptance certificates
The contract says the rights are transferred. The acceptance certificate records what exactly was handed over and when. Without certificates it's hard to prove which piece of code became yours and on what terms.
The simplest solution: a certificate after each stage or every month, with a short description of the work done and a separate line on the transfer of rights.
Confidentiality
The developer sees your code, user data and business logic. A confidentiality clause or a separate NDA sets out what they may and may not do with it, including after the work ends.
Third-party libraries and open source
Almost every project uses open source. The contract should require the developer to disclose the libraries used and their licences. Some licences require you to open your own code too if you distribute it, and it's better to know that in advance.
If the developer is a sole proprietor
Working with a sole proprietor is convenient, but the contract shouldn't look like employment: fixed hours, subordination, a “position”. Describe the result of the work, not the process, and pay against acceptance certificates. Otherwise the tax office may see disguised employment in it.
Check your contract
Go through your developer agreement:
- there's a clause transferring exclusive property rights to the code;
- the moment the rights pass is stated (payment, certificate or creation);
- acceptance certificates describing the work are signed;
- there's a confidentiality clause or a separate NDA;
- the developer discloses third-party libraries and their licences;
- for a foreign contractor, the governing law, language and dispute procedure are stated.
If a point is missing, it's not a disaster. But it's better to fix it now than during negotiations with an investor. I drafted an agreement like this for a client from Poland working with Ukrainian developers.
More about the service: developer agreement.
Frequently asked questions
Can rights be transferred to code that's already written?
Yes. A separate agreement is signed transferring the property rights to the code already created, describing exactly what's transferred.
Do I need an NDA if the contract already has a confidentiality clause?
Not necessarily. A separate NDA is handy when you show the project before the main contract is signed.
The developer is from another country. Which law should I choose?
It depends on where the parties are and where you'd litigate. What matters is that the law, the language and the dispute procedure are written down, not left for later.
This article is general in nature and is not legal advice. Every situation has its own nuances.
