The verdict in three sentences
If your contract has no IP assignment clause, the code of your custom app may legally belong to the vendor who wrote it, even though you paid for it. Leaving a vendor is negotiated on three levers: the contract, software escrow ($1,500 to $5,000 a year) and a takeover audit of $6,000 to $14,000. Plan 10 to 20 days of knowledge transfer inside a written transition plan to avoid a service break.
What the law says and what the contract must state
Under US copyright law, code written by an independent contractor belongs to the contractor unless there is a signed written assignment; software rarely qualifies as work made for hire outside employment. UK law follows a similar logic, and French law (article L131-3 of the Intellectual Property Code) requires each assigned right to be listed. A paid invoice alone is not enough anywhere: without a clause you hold at best a licence to use, not the right to modify or hand the code to another vendor.
| Clause | What it must specify | Risk if missing |
|---|---|---|
| IP assignment | Reproduction, modification, distribution, worldwide, full term | Cannot evolve the code elsewhere |
| Source code delivery | Full Git repository with history, at every milestone | Code delivered as binaries or incomplete |
| Third-party and open source components | List and licences (MIT, GPL, commercial) | Legal block or licences to rebuy |
| Environment access | Cloud, DNS, repository and CI accounts in the client's name | Technical hostage situation |
| Transition plan | Assistance period, included days, rate, documentation | Open-ended billing at exit time |
| Source code escrow | Escrow agent, release triggers, update at each version | No exit if the vendor disappears |
2026 costs of a well-prepared exit
Exit cost depends mostly on code quality and existing documentation. The ranges below are 2026 orders of magnitude for a business app of 50,000 to 150,000 lines of code.
| Item | 2026 range | Lead time |
|---|---|---|
| Basic software escrow (deposit only) | $1,500 to $2,500 a year | 1 to 2 weeks |
| Escrow with technical verification | $3,000 to $5,000 a year, plus one-off verification | 2 to 4 weeks |
| Takeover audit (code, architecture, security, debt) | $6,000 to $14,000 | 2 to 4 weeks |
| Knowledge transfer by the outgoing vendor | 10 to 20 days, $10,000 to $20,000 at $1,000 a day | 3 to 6 weeks |
| Documentation catch-up | $3,500 to $9,000 | 2 to 4 weeks |
| Moving cloud accounts and domains | $1,000 to $3,500 | 1 week |
| Litigation if the vendor refuses | $25,000 to $100,000 and 12 to 24 months | long |
The last line explains why negotiation almost always beats litigation: even with a strong case, a year of deadlock usually costs more than a billed knowledge transfer. For reference, French escrow through the APP costs €300 to €900 a year.
The four-step method to take back control
First, reread the contract, statements of work and terms: an assignment may sit in a forgotten schedule. Second, secure right away every account held in your name (domain, cloud, Google or Apple developer accounts). Third, have the incoming vendor run the takeover audit on an export of the Git repository. Fourth, negotiate a fixed transition package capped in days and deliverables, rather than an uncapped day rate.
Mini case study
Mark, CEO of a mid-sized manufacturer in Ohio, has used a production management app for 7 years, built by a vendor that bills $1,000 a day for about 60 days a year, or $60,000. The vendor refuses to hand over the code. The original contract includes an IP assignment but no transition terms.
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Mark enforces the clause, obtains the Git export and negotiates 15 days of transfer, $15,000. The takeover audit costs $9,000 and documentation $5,500. Total exit cost: $29,500. The new vendor bills $700 a day for the same volume, $42,000 a year. The $18,000 annual saving pays back the exit in about 20 months, and the company now holds an up-to-date escrow deposit.
FAQ
Do I own the code if I paid for development?
Not automatically when a contractor wrote it. You need a signed written assignment; without it you often have only a licence, and challenging that can cost $25,000 to $100,000 in legal fees.
Basic escrow or verified escrow?
Basic escrow ($1,500 to $2,500 a year) stores the deposit and defines release triggers. Verified escrow ($3,000 to $5,000 a year) also checks that the deposit actually builds, which matters for business-critical apps.
How many days of knowledge transfer should we plan?
Allow 10 days for a well-documented 50,000-line app, and up to 20 days above 150,000 lines or with no documentation.
Is a takeover audit essential?
Yes, because it prices the technical debt before you sign with the new vendor. For $6,000 to $14,000 it prevents a takeover quote underestimated by 30 to 50%.
What belongs in a new development contract?
Full IP assignment, Git repository delivery at every milestone, cloud accounts opened in the client's name and a transition package of 5 to 10 days at the contract rate.
Let's scope your project. Send us your current contract and a description of the app: we run the takeover audit for $6,000 to $14,000 and plan a 6 to 10 week transition with no service interruption. Detailed quote within 48 h. WhatsApp +221 77 596 93 33.
Mohamed Bah
Fondateur, Kolonell
Passionate about digital and entrepreneurship in Africa, Mohamed has been helping Sénégalese businesses with their digital transformation since 2020. Founder of Kolonell, he believes every SME deserves a professional and accessible online présence.
