The verdict in three sentences
Under German law, copyright in software cannot be transferred: the developer remains the author, and the client only receives usage rights (Nutzungsrechte), so everything depends on how broadly the contract grants them. Three clauses protect an SME: exclusive, unlimited usage rights including modification, regular delivery of documented source code (or escrow at 1,000 to 3,000 EUR a year) and a priced exit plan. Without them, handing the application to a new vendor costs 15,000 to 40,000 EUR and 2 to 3 months of transition.
A situation more common than people think
Jonas runs a Berlin B2B services company (40 employees). His field service scheduling app, built in 2022 for 50,000 EUR by a small agency, runs on the vendor's server. The relationship sours after a 40% support price increase. Jonas asks for the source code to switch vendors. The answer: the contract grants a simple, non-exclusive right of use, without source code and without a right to modify.
That is consistent with German copyright law. The author keeps the copyright, and where a contract is vague about the scope of usage rights, courts tend to apply the purpose-of-transfer principle (Zweckübertragungslehre): the client receives only the rights strictly needed for the contract's purpose. Running the software may be covered; modifying it with another vendor often is not.
Clauses to require, one by one
| Clause | What it should say | Common mistake | Risk if missing |
|---|---|---|---|
| Usage rights | Exclusive, irrevocable, unlimited in time and territory, including modification, reproduction and sublicensing to future vendors | Software becomes client property, with no detail | High |
| Source code delivery | Code pushed to a Git repository owned by the client, every release or monthly | Code delivered on request at the end only | High |
| Third-party and open source | List of libraries and licences, no proprietary vendor component without a perpetual licence | Vendor's in-house framework not licensed | Medium to high |
| Documentation | Architecture, setup guide, database schema, access and secrets | The code documents itself | Medium |
| Hosting and accounts | Domain, servers, cloud and app store accounts in the client's name | Everything opened under the agency | High |
| Exit plan | Transition support, duration, day rate fixed in advance | Exit mentioned without duration or price | Medium |
| Escrow (optional) | Deposit with a third party, release triggers (insolvency, end of support) | Deposit never updated | Low to medium |
Escrow is mainly useful when the vendor keeps a proprietary component or when a software publisher refuses to hand over code. If code is pushed monthly to a client-owned repository, escrow becomes almost redundant.
What each option costs in 2026
| Option | Cost | What you get | Limit |
|---|---|---|---|
| Exclusive usage rights in the contract | 0 to 10% added to the project price | Full control over the code | Negotiate before signing |
| Client-owned Git repository | Free to 20 EUR a month | Continuous access to source | Does not guarantee documentation quality |
| Third-party escrow | 1,000 to 3,000 EUR a year | Code release if the vendor fails | Updates often forgotten |
| Exit plan | 5 to 15 days of support at a fixed rate | Managed transition | Must be priced in the contract |
| Takeover without documentation | 15,000 to 40,000 EUR | Audit, reverse documentation, clean-up | 2 to 3 months with no new features |
| Full rewrite | 60 to 120% of the original cost | New application | Most expensive and slowest |
These are 2026 orders of magnitude observed in Germany for applications in the 30,000 to 150,000 EUR range. A clause negotiated in 30 minutes before signing avoids a five-figure bill.
Mini case study
After mediation, Jonas obtains a copy of the code, but no documentation. His new vendor prices the takeover.
- Code audit and reverse documentation: 12 days at 800 EUR = 9,600 EUR.
- Updating outdated dependencies and security fixes: 18 days at 800 EUR = 14,400 EUR.
- Migration to hosting in the company's name: 4 days at 800 EUR = 3,200 EUR.
- Total: 27,200 EUR and 10 weeks without new features.
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With exclusive usage rights, a monthly Git push and an 8-day exit plan at a fixed rate, the same switch would have cost about 6,400 EUR. The difference: roughly 20,800 EUR and two lost months. For his next project, Jonas scores exit and ownership at 15% in his vendor selection, as described in our guide to scoring agency proposals for a software RFP.
FAQ
Does a signed quote give us rights to the code?
Rarely enough. The contract should spell out exclusive usage rights, modification rights and source delivery; a vague quote is read narrowly under the purpose-of-transfer principle.
Is software escrow mandatory?
No, it complements usage rights when the vendor keeps proprietary components. Budget 1,000 to 3,000 EUR a year in Germany and check that the deposit is updated at least at every major release.
Do broad usage rights raise the price?
Sometimes by 0 to 10%, especially if the vendor reuses modules it sells elsewhere. Negotiate a perpetual, royalty-free licence for those modules instead.
What should an exit plan include?
A list of deliverables (code, database, documentation, credentials), 5 to 15 days of transition support and a day rate fixed in the contract for at least 3 years.
How long does a vendor transition take?
Two to six weeks with documentation and an up-to-date repository, two to three months without, based on takeovers observed in 2026.
Let's scope your project. Send us your current contract or your application project and we will point out the missing clauses and the scope of any takeover. 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.
