I paid for everything. Doesn’t that make it mine?

Not automatically. Payment and ownership are separate questions; ownership of intellectual property is usually transferred by a written clause. Without it, you may have a licence to use the software but not the right to modify, sell or hand it to another vendor.

Can a vendor keep reusing code they wrote for me?

It depends on the contract. Generic components and know-how usually stay with the vendor; code specific to your product should be yours. Define the line explicitly — and make sure you have a licence to anything of theirs that’s embedded in your product.

What is source-code escrow and do I need it?

Escrow means a third party holds a copy of the code, released to you under agreed conditions (for example, if the vendor goes out of business). It’s useful when you only license software. If the repository is already in your own account, you mostly don’t need it.

Our contract says ownership transfers at the end of the project. What now?

Ask for an amendment that transfers rights per paid milestone, and in the meantime make sure the repository and cloud accounts are in your company’s name. Both are reasonable requests that a trustworthy vendor will accept.

Guide · Contracts & ownership

Who really owns your code? Check these clauses.

Many founders discover who owns their product at the worst possible moment: during due diligence for an investment, when a vendor relationship ends badly, or when an acquirer asks for the IP chain. Paying the invoices is not the same as owning the result. Here’s what decides it.

By Nythrex EngineeringUpdated 24 September 2026 5 min read

Your product

Source code
Cloud & infrastructure
Data & databases
Domains & app stores
Designs & docs
Prompts & AI models
Third-party accounts

Ownership isn’t one thing. Each of these needs to be legally yours and practically under your control.

The uncomfortable default

In many legal systems, the person or company that writes code is its first owner, and rights move to the client only through a written transfer. Rules differ by country. In Ukraine, for example, the Civil Code provides that property rights to a work created on commission belong to the creator and the customer jointly, unless the contract says otherwise (Article 430). In the US, software written by an independent contractor generally isn’t a “work made for hire” by default, so a written assignment is needed. The practical lesson is the same everywhere: don’t rely on defaults — write it down.

The five clauses that matter

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1. A present assignment of IP
Look for wording that actually transfers the rights (“hereby assigns”), not a promise to transfer them later (“will assign”). It should cover code, designs, documentation and all other deliverables, and it should cover work by the vendor’s employees and subcontractors.
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2. When ownership moves
“On completion of the project” is risky: if the project never completes, you may never own anything. Better: rights transfer for each milestone upon payment, so what you’ve paid for is yours.
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3. Background IP and reusable components
Vendors reuse their own libraries and tools. That’s fine, as long as you get a perpetual, irrevocable, royalty-free licence to everything embedded in your product, including the right to modify it and to let another vendor maintain it.
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4. Open-source components
Almost every product uses open source. The contract should require a list of components and licences, and should restrict licences that could oblige you to publish your own code (for example, certain copyleft licences used in distributed software).
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5. Exit and handover
Define what happens when the relationship ends: notice period, delivery of all code and documentation, transfer of accounts, and a number of hours of paid knowledge transfer. The time to negotiate this is before you need it.

AI projects: the assets people forget

AI systems produce assets that don’t look like code but are just as valuable. Make sure the contract names them explicitly:

Asset	Why it matters	What to require
Prompts & configurations	Encode months of tuning; small changes shift quality	Delivered and version-controlled in your repository
Evaluation datasets	The only way to prove quality and catch regressions	Owned by you, with the scripts that run them
Fine-tuned model weights	Expensive to reproduce; tied to your data	Trained in your provider account where possible; weights and training data yours
Embeddings & search indexes	Derived from your data; rebuilding costs time and money	Stored in your cloud; export format agreed
Model-provider accounts & keys	Control of usage, billing and data settings	Registered to your company; vendor gets scoped access

A related question: can AI-generated code be protected at all? Several jurisdictions currently require human authorship for copyright. This is still developing law, but it is one more reason to define ownership of deliverables contractually rather than relying on copyright defaults.

Legal ownership vs practical control

Legally yours, practically theirs

The contract assigns IP to you…
…but the repository is in the vendor’s GitHub organisation
…production runs in the vendor’s cloud subscription
…the domain is registered to a vendor employee
…only the vendor can deploy

Yours in every sense

IP assignment per paid milestone
Repository in your organisation; vendor has member access
Cloud accounts owned and billed to your company
Domains, app-store and third-party accounts in your name
Documented deployment your own engineer can run

Vendor lock-in test

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Is the Git repository in an organisation account your company owns?

Contract review checklist

Take this to your lawyer

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At Nythrex, client ownership is the default: code, cloud accounts and data belong to the client from day one, we work through delegated access you can revoke, and every project is kept handover-ready. See how in How we work.

Frequently asked questions

GuideSwitching vendors without a rewriteHow to change development vendors safely: secure assets, plan the handover, transfer knowledge and keep shipping — with a complete handover checklist.Free toolVendor lock-in testTwelve questions about code, cloud, access, contracts and docs reveal how locked in you are to your development vendor — with a prioritised fix list.Guide13 red flags your vendor is hiding problemsVague reports, shifting dates, no access to code: 13 signs your outsourced project is in trouble — and what to ask or do about each this week.GuideFixed price vs T&M vs milestonesWhich contract model protects you? Fixed price, time & materials and milestones compared on risk, flexibility, incentives and hidden costs.ServiceProject rescueVendor gone, deadline slipping, code nobody understands? We take over troubled software and AI projects: fast audit, stabilisation, a plan you can trust.Guide40 questions to ask an AI vendorDue-diligence checklist for hiring an AI development company: approach, data, quality, security, cost, ownership and team — and what good answers sound like.

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