Buyers assume that paying for software means owning it. In many jurisdictions that is not automatic. Ownership follows the contract, and a vague or missing clause is expensive to fix once a dispute has started. This checklist covers the clauses worth negotiating before work begins. It is general information, not legal advice, so have your own counsel review the final contract.
Assignment, not just a licence
Ask for a written assignment of intellectual property to you, effective on payment, covering source code, designs, databases and documentation. A licence to use is much weaker. Under Indian copyright law, if an assignment does not state its duration or territory, defaults can apply that limit it, for example a shorter period and India only. State clearly that the assignment is perpetual and worldwide.
Third-party and open-source components
- Require a list of third-party and open-source components with their licences
- Restrict use of licences that would force you to publish your own code
- Confirm the vendor has the right to supply every component it delivers
Confidentiality
A mutual NDA should be signed before sensitive material is shared. It should name what counts as confidential, how long the duty lasts, how data is returned or destroyed at the end, and whether subcontractors are bound.
Acceptance and payment
- Milestones with written acceptance criteria, so everyone knows when something is done
- Payment tied to acceptance, not to elapsed time
- A defined warranty period during which defects are fixed at no charge
- Change requests priced separately and agreed in writing
Ownership of accounts and environments
Source repositories, hosting, domains, app store accounts and analytics should be registered in your company name from day one. It costs nothing at the start and removes the most common hostage situation in outsourcing.
Ending the relationship
Write down what happens on termination: delivery of the latest code and documentation, a handover period, and what is owed for work completed. A contract that is silent here gives the vendor leverage at exactly the wrong moment.
Governing law and disputes
Name the governing law and the dispute process, including whether arbitration is used and where it sits. India is a party to the New York Convention, which supports the enforcement of foreign arbitral awards, but the details depend on the facts, so take advice.