The verdict in three sentences
For a website and extranet project worth EUR 60,000 excluding VAT, the contract matters as much as the design: without an explicit assignment of intellectual property rights, you pay for code you do not own. The three clauses that prevent lock-in are assignment of rights in the bespoke code, a priced exit plan (5 to 15 days of handover) and source code escrow for EUR 500 to 1,500 a year. A Dublin mid-sized company that negotiates these points before signing usually saves months of deadlock the day it wants to switch suppliers.
What Irish law says and what the contract must add
Under the Irish Copyright and Related Rights Act 2000, the author of software is its creator, unless the developer is an employee. An agency is a contractor, so without a written assignment it keeps copyright in the code it writes for you. An assignment must be in writing and signed, and a vague line such as "the client owns the website" is weak in a dispute.
Separate three layers. The bespoke code written for your project should be assigned. The agency's reusable components (internal modules, base theme) are covered by a non-exclusive, perpetual, transferable licence. Open source components (Next.js, Drupal, WordPress, npm libraries) stay under their original licences, which the contract should list.
| Clause | Weak version to reject | Version to negotiate in 2026 |
|---|---|---|
| IP assignment | "The client owns the site" | Assignment of copyright in bespoke code, worldwide, full term |
| Agency components | Not mentioned | Non-exclusive, perpetual licence, transferable to a new supplier |
| Open source | Not listed | Licence inventory (MIT, GPL, Apache) delivered at handover |
| Git repository access | On request | Repository in the client's name from the first sprint |
| Hosting accounts | Opened by the agency | Cloud, DNS and domain accounts in the company's name |
| Documentation | "If required" | Technical and operations documentation delivered and maintained |
| Price of assignment | Implied | Included in the fixed fee, stated explicitly |
Exit plan, escrow and penalties: the figures to set
The exit plan organises the transfer to another supplier or to your IT team. A serious plan sets a duration (5 to 15 working days depending on project size), a capped day rate and a list of deliverables: code, deployment scripts, database schema, credentials, documentation. Escrow protects against agency failure: the code is deposited with a third party (NCC Group, Escrow London or similar) and released on insolvency or end of support.
| Mechanism | 2026 order of magnitude | What it covers |
|---|---|---|
| Source code escrow | EUR 500 to 1,500 per year | Insolvency, closure, end of maintenance |
| Exit plan | 5 to 15 working days | Handover to a new supplier |
| Exit day rate | EUR 600 to 900 per day, capped | Support for the incoming team |
| Delay penalties | 0.5 to 1% per week, cap 5 to 10% | Acceptance and go-live milestones |
| Warranty period | 3 to 12 months after acceptance | Free defect correction |
| Retention | 5% of price, released at 3 months | Closing of open defects |
| Liability cap | 1 to 2 times contract value | Direct damages |
Penalties are mostly useful when they are capped and act as liquidated damages: a serious agency will accept 5 to 10% of the price, beyond that it will inflate its quote to cover the risk. Tie them to milestones you also control: a delay caused by your content or approvals suspends the clock.
One point often forgotten: the extranet data. The contract should require a full export in an open format (CSV, JSON, SQL) within 10 days and define the agency's GDPR role (processor, Article 28), with security and deletion obligations at the end of the contract.
Mini case study
Siobhan, general counsel of a 450-employee company in Dublin, signs with her CIO a website and distributor extranet project at EUR 60,000. The first draft contract has no detailed assignment, no escrow and no exit plan. She negotiates three additions: escrow at EUR 1,000 a year, an exit plan capped at 10 days at EUR 750, penalties capped at 8%.
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Over 4 years, the maximum extra cost is EUR 4,000 of escrow plus EUR 7,500 of exit support if triggered, so EUR 11,500. The no-clause scenario is well known: a partial rebuild estimated at 40% of the original project, EUR 24,000, plus 3 to 4 months of frozen extranet for distributors. Risk avoided versus cost is above 2 to 1, before counting legal time saved.
FAQ
Can the agency refuse to assign the source code?
Yes, some agencies sell a licence to keep their proprietary modules. In that case require at least assignment of the bespoke code and a perpetual licence on the rest, or compare with an offer that assigns everything for 5 to 10% more.
Is escrow worth it for a EUR 60,000 project?
For a simple brochure site, rarely. For a business extranet your distributors depend on, EUR 500 to 1,500 a year is less than 2.5% of the budget to cover supplier failure.
What penalty cap is reasonable?
Between 5 and 10% of the total price, at 0.5 to 1% per week of delay on a contractual milestone. Above that, the agency prices in the risk or declines to sign.
How long should the warranty last?
Allow 3 months for a brochure site and 6 to 12 months for an extranet with business rules. The warranty covers deviations from the specification, not new features.
Do we need a lawyer to review the contract?
For a EUR 60,000 commitment, a review by a technology lawyer costs EUR 1,000 to 2,500 and pays for itself with the first dispute avoided.
Let's scope your project. Send us your specification and draft contract: we price the scope, indicative budget and timeline, with code assignment and exit plan included. 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.
