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Who Owns the Code When an Agency Builds Your Software?

IP assignment, source code access, and what happens if the relationship ends — a topic almost no agency writes about, and one worth understanding before you sign.

Who Owns the Code When an Agency Builds Your Software?

Who Owns the Code When an Agency Builds Your Software?

This is a question most buyers don't think to ask until something has already gone wrong — and it's a topic most agencies don't write about, because the honest version of the answer isn't always flattering. Here's how it typically works, and what to check before you sign anything.

IP assignment

In a standard bespoke software agreement, intellectual property in the code should transfer to the client, usually on full payment, via an explicit IP assignment clause. Without that clause stated plainly, the default position in many jurisdictions can leave the agency owning the copyright even though you paid for the work — which is rarely what either side intended, but matters if it's never written down.

Source code escrow and repository access

Ask, before the project starts, whether you get direct access to the actual source code repository (GitHub, GitLab, or similar) during and after the build, or whether the agency retains sole custody and only hands over a build artifact. Ongoing repository access is the difference between being able to move to another developer later and being effectively locked in.

Third-party licences

Most software includes open-source libraries and paid third-party services. Check what licences those components carry, and whether any paid subscriptions (APIs, hosting, design assets) are billed to you directly or bundled through the agency — the latter can quietly break if the agency relationship ends.

What happens if the relationship ends

Before signing, it's worth knowing: can you take the codebase, as-is, to another team? Is documentation good enough for someone new to pick it up? Is there a transition period built into the contract, or does support simply stop? A good agency should have straightforward answers to all three.

This is not legal advice

IP and contract law varies by jurisdiction and by the specific wording of your agreement. Treat this as a list of questions to raise, not as a substitute for having a solicitor review the actual contract before you sign — especially the IP assignment and termination clauses.

If you're at the stage of evaluating agencies generally, our post on what to ask before hiring one covers the broader list this fits into.

Tags:
code ownership
contracts
buying guide
agency
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