You have agreed a price and a timeline for your app. The next document decides whether you own what you are paying for. Many founders find out too late that the invoice was paid but the code was never formally transferred.
The short answer
Paying a developer does not by itself make you the owner of the code. Ownership has to be written down and signed. This article is general information, not legal advice, so have a lawyer review the final contract.
Read the ownership and assignment clauses before you sign, not after the app is built. Photo: Blogtrepreneur, CC BY 2.0, via Wikimedia Commons
What the law says
United States. The Copyright Act says copyright in a work vests initially in its author, and a transfer of ownership is not valid unless it is in writing and signed by the owner of the rights being conveyed (sections 201 and 204). There is a "work made for hire" route, but the Copyright Office explains that a commissioned work qualifies only if it falls within one of nine listed categories and both parties sign a written agreement saying it is made for hire. Custom app code does not obviously fit those categories, which is why an explicit assignment clause is the safer addition.
India. Under the Copyright Act, 1957, the author is the first owner unless an exception applies; for a work made in the course of employment under a contract of service, the employer is the first owner absent a contrary agreement. A freelancer or an outside agency is not your employee. Section 19 says an assignment is valid only if it is in writing and signed by the assignor, must identify the work, and must specify the rights assigned, the duration and the territory. If the duration is not stated it is deemed to be five years, and if the territory is not stated it is presumed to be India. For an app you plan to sell abroad, that default could surprise you.
Clauses to look for
- Ownership and assignment. A clause that assigns all rights in the deliverables to you on payment, naming the code, designs and documentation, with the term and territory stated (for example, the full term of copyright and worldwide).
- Pre-existing and third-party code. The developer's own libraries and open-source packages stay under their licences. Ask for a list so you know what you can and cannot relicense.
- Source code handover. When you receive it, in what form, and that it is complete enough to build the app without the vendor.
- Accounts in your name. Apple Developer, Google Play, cloud hosting, analytics and API accounts should belong to you from day one.
- Payment and milestones. Tie payments to delivered milestones, matching the pricing model you chose. Our guide to fixed price vs time and materials explains how each model shifts risk.
- Acceptance and warranty. How you test, how long the vendor fixes defects at no charge, and what counts as a defect.
- Confidentiality and data. Who can see your user data, where it is stored, and what happens to it when the contract ends.
- Termination. What you receive if you part ways midway, including the code written so far.
- Support after launch. Whether maintenance is included, and the rate if it is not.
Questions to ask a developer before signing
- Will you sign an assignment of copyright to us, covering the full term and all territories?
- Which third-party or open-source components will the app include, and under what licences?
- Will the store and cloud accounts be created in our company name?
- Can we receive the repository at every milestone, not only at the end?
- What happens to the code if either side ends the contract early?
A vendor that answers these plainly is usually a safer partner. If you are still comparing vendors, our checklist on how to choose a software development company covers the other signals to look for, and the mobile app development service page shows how we scope and hand over projects.
Where deals go wrong in practice
Most disputes are not about law but about gaps nobody wrote down. Three patterns come up again and again:
- Ownership promised, never assigned. The founder assumes "I paid, so it's mine", and the contract says nothing about assignment. Without a signed transfer, the developer may still hold the copyright and you hold only a licence the contract may not even grant.
- Handover left vague. The code exists, but the contract does not say you receive the repository, build scripts, app store accounts and credentials. When the relationship ends, you discover you cannot update the app.
- Third-party and open-source parts ignored. Apps use libraries, SDKs and templates with their own licences. If the contract does not list them, you cannot tell what you actually own or must credit.
None of these needs a complicated fix. Each is a sentence or two in the agreement, which is why it is worth reading it with a pen in hand before the first payment.
How to run the review
- Read the ownership, assignment and licence clauses first, then the payment terms, because the two often interact: some contracts transfer rights only on final payment.
- Highlight anything that says "licence" where you expected "assignment".
- Ask for the handover list in writing: source code, design files, accounts, keys and documentation.
- Have a lawyer qualified in your country review the final draft. This article is general information, not legal advice.
Quick checklist before you sign
- Ownership clause names the deliverables and states term and territory
- Source code and documentation delivered at each milestone
- Store, cloud and API accounts registered to you
- List of third-party and open-source components with licences
- Payment tied to accepted milestones
- Warranty period and support terms written down
- A lawyer has reviewed the final draft
Key takeaways
- Paying for an app does not by itself make you the owner; you need a signed written transfer.
- Put assignment, handover items and third-party licences in the contract, not in emails.
- Tie ownership to a clear point, and keep accounts and credentials in your own name from day one.
- Have the final draft reviewed by a lawyer before you sign.
Sources
- U.S. Copyright Office, Circular 30, Works Made for Hire (revised August 2024): https://www.copyright.gov/circs/circ30.pdf
- U.S. Copyright Act, Title 17, Chapter 2, sections 201 and 204: https://www.copyright.gov/title17/92chap2.html
- India, The Copyright Act, 1957, Chapter IV (sections 17 to 19A): https://copyright.gov.in/Copyright_Act_1957/chapter_iv.html
