UK Business

Paying a supplier to build software does not make you the owner of it. In the UK, and in most of the jurisdictions British companies outsource to, copyright in code vests in the author by default — which means the agency, the freelancer or the offshore studio that wrote it, unless a contract says otherwise in exactly the right words. This guide works through source code ownership the way it actually goes wrong: the legal default nobody checks, the three ownership models suppliers offer, the background IP and open-source carve-outs that hollow out an assignment clause, why escrow is a fallback rather than a substitute, and how to prove at handover that you can genuinely rebuild the product without the people who wrote it.

Most disputes in bespoke software development are not about quality — they are about ownership, access and exit, the three things nobody negotiates while everyone is still optimistic. This software development contract checklist works through the clauses in the order they cause trouble: intellectual property and assignment, source code, repositories and escrow, third-party and open-source licence risk, exit rights and termination, data protection and security obligations, warranties, liability caps and indemnities, and payment, acceptance and change control. Each section gives the wording to look for, the red flag that means you are about to sign something expensive, and the practical fallback when a supplier will not move.

The same 3,200-hour build can be quoted at £180,000 under one commercial model and £240,000 under the other, and the cheaper quote is very often not the cheaper project. This guide treats fixed-price vs time-and-materials as a risk-allocation decision rather than a pricing one: a full head-to-head comparison table, how each model actually behaves once delivery starts, what the cost-overrun research really shows, the hidden costs neither side advertises, a project-type decision matrix, a risk register showing who carries what, the capped and hybrid structures most experienced buyers end up using, a five-question framework for choosing, the contract clauses that protect you in either model, and straight answers to the questions buyers ask most.