Hiring a developer: how to protect your business

It is now almost impossible for any business to operate without some form of software development. Whether it is a website, business application or SaaS service, it is sometimes difficult to carry out these developments in-house. You must therefore engage an external developer or IT service provider.

I regularly see situations where the development process has not been clearly defined, leading to disputes at delivery or at payment stage. Equally common is the absence of any provision for the transfer of intellectual property rights over the deliverables. A properly drafted services agreement is essential to address these issues.

Key provisions of an IT development services agreement

The content of an IT development agreement varies by project, but certain provisions are consistently required:

• Development schedule: include realistic timelines to avoid overruns.
• Scope and deliverables: the scope must be set out in a detailed annex (specifications, commercial proposal, etc.).
• Acceptance testing procedure: define the period for the client to raise defects, the correction period, and any limit on the number of acceptance rounds.
• Nature of obligations: obligation of result or best efforts.
• Payment terms: fixed fee, daily rate, milestones, late payment consequences.
• IP assignment: see below.
• Non-infringement warranty from the developer.
• Confidentiality.
• Liability: ensure the developer’s liability is not excessively limited.
• Termination for breach.
• Governing law and dispute resolution.

For a detailed analysis of each provision, see my article on the essential clauses in a software development contract. If the engagement is on a time-and-materials basis, see also the article on freelance T&M contracts.

Transferring intellectual property over the deliverables

Source code — whether for a website, software or any other development — is protected by copyright under French law. If you commission a development, you must ensure that the intellectual property is properly assigned to you.

Article L131-3 of the French Intellectual Property Code provides that, absent a compliant written assignment, the developer retains all rights over the deliverables. The agreement must specify the rights assigned, the duration, the territory, the price of the assignment, and the permitted uses.

Without these elements, no IP rights are transferred. You will not own your developments, which can have a material impact on your business. For further detail, see the article on intellectual property in SaaS.

IP and fundraising: a due diligence essential

During a fundraising round, investors systematically verify that the company holds full ownership of the intellectual property in its developments. Missing or poorly drafted assignment agreements can delay or block investment. It is far better to address this from the initial contracting stage. For an overview of the key provisions, see the SaaS contracting guide.

Conclusion

Engaging a developer without a contract is a risk to your IP ownership, your timelines and your ability to respond if things go wrong. A clear agreement does not slow the project down — it secures it. If you need to draft or review a development contract, book a call.

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