Contract glossary

IP ownership / work for hire

Who owns the work product in a services contract?

Most services contracts say something about who ends up owning the deliverables. The strongest customer version is work-made-for-hire with a backup assignment: everything created under the agreement belongs to the customer from the moment it exists.

For a provider, the danger is how wide that language reaches. Written broadly, it captures not only the deliverable but the tools, scripts, templates, and methods used to build it — the reusable work that makes the next engagement profitable. Sign that repeatedly and you sell the business's future one project at a time. The standard carve-out is background IP: the customer owns the deliverable, the provider keeps what it brought with it and anything general-purpose it develops, licensed to the customer as incorporated.

For a buyer, the thing to confirm is that you actually own what you paid to have built, and that you have a license broad enough to use it after the relationship ends — including having someone else maintain it.

In a contract

"All deliverables are works made for hire. Provider retains ownership of its pre-existing and general-purpose tools, methods, and templates, and grants Client a perpetual license to those elements as incorporated into the deliverables."

Related terms

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Definitions and negotiation guidance here are educational business decision support, not legal advice. Consult an attorney about how any clause applies to your own agreement.

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