The assumption, the clause that fixes it and the waiver most founders have never heard of. Just because you paid someone to write code for your company, doesn’t mean it’s legally part of your IP.
And you don’t want to find that out when trying to sell the business, so how do you make sure you actually own the code a contractor wrote?
Jacques Stemmet is a senior associate at Dommisse Attorneys, where he runs the IP and trademark practice and works across the firm’s VC transactional team. He sees the same ownership gap surface again and again — usually at the worst possible moment.
The move: get the assignment in writing, up front
The default rule catches founders off guard: whoever writes the code owns it, unless they’ve validly assigned it to you. Paying them doesn’t transfer ownership. Only a proper assignment does.
“If an independent developer writes your code, they own it unless there’s a valid assignment — even though you paid and gave the instructions. GitHub is not a title deed.”
How to own the code you paid someone to build
1. Put a written assignment clause in every contractor agreement
Before a contractor writes a line of code, the agreement they sign needs an IP assignment clause that transfers ownership of what they create to your company. No clause means no transfer; you’re relying on an implied licence that won’t survive a buyer’s scrutiny.
This is the single most common gap, and it starts on day one of the relationship. Paying invoices does not quietly fix it later.
2. Make sure it says “hereby assigns,” not “will assign”
The exact words matter more than founders expect. An assignment has to be a present transfer; the party “hereby assigns” the IP, here and now.
“‘Hereby assign’ is a present transfer. ‘Will assign’ is only a promise to do it later — and it needs a further act to actually be valid.”
“Will assign” leaves you holding a promise, not the asset. If the contractor has since disappeared, raised their price, or fallen out with you, that promise can be very hard to collect on. Insist on the present tense.
3. Get a moral-rights waiver as well
Even after someone assigns you the copyright, they keep their moral rights, including the right to object to modification or mutilation of their work. That sounds abstract until you want to change, refactor or build on the code they wrote.
A moral-rights waiver, signed alongside the assignment, is what lets you freely modify the work and make derivative works. Without it, ownership of the code doesn’t give you the free hand you assumed came with it.
4. Go back and fix the gaps you already have
Most founders reading this already have contractors in their history with no proper assignment. Don’t wait for due diligence to discover it. Go back through everyone who’s touched your core code and get signed assignments in place now, while the relationships are still good and the stakes are low.
A contractor is far more likely to sign a clean assignment over a coffee today than during your acquisition, when they’ve realised how much leverage they quietly hold. Clean the chain of title before anyone has a reason to make it expensive.
The big payoff
Get the assignments and waivers right, and you own what you think you own — provably. When a buyer or investor asks for a clean chain of title, you have it, and the valuation doesn’t take the quiet discount that unclear ownership triggers at due diligence.
It costs you a proper clause in a contract you were signing anyway. It saves you the deal-threatening scramble years down the line.
Need to raise funds, secure IP or offshore?
Speak to Jacques and the team at Dommisse Attorneys.
Want the full playbook?
This is one piece of What You Own vs What You Think You Own, Jacques’s full masterclass inside the Founder Collab. The full session walks through the complete system for proving you own your IP:
The full IP Control Stack: the five layers that decide whether your ownership holds up
How free AI tools can quietly destroy your trade secrets, and the usage policy that prevents it
When to use a patent, a trade secret or a trademark, and how to let your business model decide
How to protect your brand with a trademark in South Africa, step by step
What “good enough” IP hygiene looks like at pre-seed, seed and growth stage
You’ll also get access to 40+ other masterclasses from SA founders and operators on sales, fundraising, UX, paid media and more inside The Founder Collab.
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