Who Owns the Source Code? — Defining Deliverable Scope

Under Korean copyright law, software copyright belongs by default to the person who created it (the vendor). This is because outsourced development is classified as a "contract for work," not a "work made for hire."

Therefore, if the contract contains no ownership-transfer clause:

Copyright of the source code belongs to the vendor

The client holds only a "right to use"

Modifying the source code or handing it to another vendor could be legally problematic

To prevent these disputes, the contract must include a clause such as "Upon full payment of the final balance, the economic copyright of the source code and all deliverables is transferred to the client."

Points to note:

"Moral rights" (such as the right of attribution) cannot be transferred (by law)

Copyright of open-source libraries remains with their original authors

The vendor's proprietary frameworks and boilerplate code are typically excluded from the transfer

In practice, most vendors agree to ownership transfer, but without explicit contract language, it is difficult to enforce legally in a dispute.

Receiving only the source code is not enough to operate and maintain the service. You must receive all of the following deliverables.

Required Deliverables:

Recommended Deliverables:

Key point: If your contract simply says "source code delivery," that is literally all you will receive. Enumerate every deliverable item explicitly to be safe.

Below are the key ownership-related clauses commonly used in practice.

Economic Copyright Transfer Clause:

"The economic copyright of software developed by Party B (Vendor) under this contract shall be transferred to Party A (Client) upon full payment of the final balance."

Exception Clause:

"However, any proprietary frameworks, libraries, or tools that Party B owned prior to this project, as well as open-source software, are excluded from the transfer."

Usage Restriction Clause:

"Party A may freely use, modify, copy, and distribute the transferred source code. Party B may not use the source code in other projects without Party A's consent."

Deliverables List Clause:

"Party B shall deliver to Party A all deliverables specified in the attached [Deliverables List] upon project completion."

Case 1: Source code withheld due to unpaid final balance

When the client did not pay the final balance, the vendor refused to deliver the source code. This could have been prevented with a clause stating "Deliverables for each milestone phase are delivered immediately upon milestone payment."

Case 2: Vendor sold the same code to another client

With no ownership transfer clause, the vendor delivered a nearly identical system to a competitor. Prevent this with an "exclusive use" or "prohibition on reuse in competing projects" clause.

Case 3: Unable to retrieve source code after vendor closure

The source code was stored only on the vendor's servers. When the vendor shut down, access was permanently lost. Prevent this by pushing source code to the client's Git repository at each milestone completion.

Prevention essentials:

1. Specify the ownership transfer clause in the contract

2. Sync source code to the client's repository at every milestone

3. Enumerate deliverables in detail

4. Include a clause prohibiting reuse in competing projects