I am developing a web application for a customer. We have agreed to a fee and now the customer wants me to hand over the source code as well because he thought that the initial fee covered him buying the source code from me as well as the app.
What I am asking is: do you think that I should give the code to my client without asking for more money or not?
Yes. For the sole purpose of maintaining a good reputation.
Get a contract for your work next time, so that deliverables are precisely specified.
edit: Also, apparently, according to the comments, that's also the without-contractual legal definition in the USA as well, as what you are doing is work-for-hire, and the standard is that they purchased your work and the products thereof; that is, the whole IP. (Correct me if I'm technically wrong here). Note that in Australia and Scotland, things differ. Again, get an agreement in writing next time that disambiguates ownership and inventorship of the code before any product is created or money passed over.
If the original agreement is unclear about whether source code is included, then you need to consider these issues:
How much money do you want from the customer in the short term?
How much future business do you want from this customer?
If it was me, I'd give them the source.
There is no contract , only verbal agreement and a downpayment on the initial fee.
My customer now wants to make a contract which will state tha I am handing over the source code to him.
In my past experience, if someone pays for custom development, they are paying for both the product and the source unless you agree otherwise. If that was not the case, then they would be screwed if anything ever happened to you. Another option is that the code be held in escrow.
In the future, get it in the contract before you start working and spell all of this out. Your reputation is worth it...
My answer COMPLETELY depends on where you are and what's in your contract. You do have a written one don't you?
Typically, you are an independent consultant unless otherwise specified. That said, you own the source UNLESS you have specifically said it is the customers. This is the same as if you commission a photographer to take your picture. The photographer owns the rights to the image and prints, the customer just gets the right to buy more prints.
That said, is the app you wrote worth losing a customer over? If you have no real plans for reselling the code then I wouldn't waste my time and just hand it over.
If it is worth something and you do have plans to resell, then price accordingly.
In many jurisdictions unless you explicitly signed a contract that specifies that you keep rights to the source code then your client own the source and you simply don't have a choice - you have to hand it over.
This applies where the default legal position for what you describe is work for hire. In these cases your client also has the copyright.
There are exceptions to this. For example in England this is the default position, but in Scotland then copyright by default stays with the coder, but the client gets a non-exclusive royalty free license.
Generally in any jurisdiction that has derived it's law from English common law then the assumption of 'work for hire' will apply, unless the law has been amended.
In all cases the default will be overridden by a contract, and if one does not exist then whether or not you position falls into "work for hire" will depend on precise circumstances and the laws of the jurisdiction. You therefore do need to talk to a lawyer.
Edited to reflect comments
Aside from what the contract says, ask yourself a couple of questions?
Base your decision on you answers to these kinds of questions.
This is going to depend on a number of factors.
All these things play a role, but in the end, if you don't have a contract and don't like the new terms the customer is trying to push on you, don't accept them. At the same time, don't expect any referals or retunr business from them. If you think you'll get referals or return business, then give him the code, take it as a lesson learned and be more specicific in writing next time.
Thank you very much for all the prompt responses.I am actually blown away by the responsiveness of tha community :)
I am going to go ahead and throw in my $0.02 here as well. Overall I share the same opinion as the others, give your client the code, at least for this time. Since you did not specifically say either way, charging them more for it would most likely make future business with them a bit hard.
Future works it is up to you to create a contract and get it signed BEFORE money changes hands to specify the terms and conditions. I personally stick with the law as it is, that my clients ALWAYS get the source code, I don't want them tied to me because "I have the source" I want them coming back to me because I delivered a high quality product that met their needs. However, depending on your specific situation you might have different needs and goals, but it is best to specify these all BEFORe you start.
If you are here in the US going after more $$ for source without a contract in place first might be grounds for a pretty nasty legal debate.
I would give them free license to the code, but you own the copyright and rights to sell it to anyone else.
In most places in the US, the local Bar Association will be happy to set you up with a low-cost consultation with a lawyer. Go talk to one. It will cost a whole lot less than having things go seriously wrong because you acted without legal advice.
Do not take legal advice from random people on web forums, and I say this as a slashdot regular.
And, as everybody else is saying, have a written contract next time, and don't accept payment or do serious development for a client without one.
depending on where you live (the laws vary in each state in the USA, and wildly in other countries) the client may implicitly own the source code, exclusively own the source code, or they may have no rights to the source code. I am not a lawyer but you should talk to one in your area.
for good customer relations, draw up a contract that is mutually beneficial. If you think you can resell the system to someone that does not compete with the original customer then put that in the contract. Otherwise, treat this as the price of a valuable lesson and give the customer the code. And do not sign anything prohibiting you from doing similar work for others in the future.
talk to a lawyer first, then negotiate; ignorance is not bliss in this situation ;-)
In the US, at least in Florida (and probably all other states - IANAL), you don't have to give him the source code, the law favors the developer. This comes from my IP lawyer, not from me.
But unless this is a really marketable app that has a lot of value and/or will change the world, I would hand it over to maintain the relationship.
You could say: if the relationship is more valuable than the source code, give up the code.
If you used any proprietary background technology, you should be very clear that you still own that at least. You can't be giving that up and the client will likely understand. If they want to use your background tech (to continue developing the product without you), then you can talk licensing
Funny though, in all my years of consulting I've never run into this. The few times anyone demanded the source it was very clear up front.
But then, I have always used a contract!
There are lots of good comments, but I don't see one particular issue addressed: is your (verbal) agreement essentially a fixed-price contract or an hourly-rate contract?
If you negotiated an hourly rate for your time, then you are essentially performing a staff augmentation role and your output is a work-made-for-hire that belongs to the client.
On the other hand, if you negotiated a fixed-price contract (one price for the whole thing regardless of your effort), then you essentially have NOT produced a work-made-for-hire and you have options for what you give to the client.
As many have already said, it is CRITICAL that you identify and adhere to the legal conventions in your jurisdiction. Consult a lawyer if feasible, but at least do some research and consult your peers in the area.
If you have the legal option, I would provide the source code based on a DOCUMENTED non-exclusive license for the client's unlimited use and modification, but where you retain exclusive copyright with all its privileges. Fill the source code with copyright declarations, add copyright and license text files with the appropriate verbiage, and provide a complete copy of the package to the client.
If necessary, give the client what they want and use this incident as a learning experience. If you include the appropriate copyright declarations and license texts in the package, then you don't even NECESSARILY need to directly discuss this issue with the client--it is unlikely that it would ever be an issue if they have the source and you have the source and you each pursue your own interests with it.
Why do you even want to keep the code anyway?
As stated above, they own the code. Not only do they have a right to it, but technically, you don't even have the right to use the code from the project for other clients/projects.
The only time that you would ever do custom development for a client and even think about keeping the source code is if it is stated that you are creating a product which you own in your contract. Usually this might happen if you are creating a product using the client as the pilot in exchange for a free/cheaper license. And even in this case, I would say, just give them the source code.
Many people have to justify paying you to their bosses. You, to them, are nobody. You don't have a name. They either want to hear a name, or they want to know that if you ever gave them a system which is "broken" that they are able to fix it on their own. Then if they hire you back, it's because they like your work and not because you have them by the short hairs. This creates good will, which will make you more money in your lifetime then any of the source code that you will give them.
It's possible that under copyright law you would still have the ownership of the code. See this case from the reg: http://www.theregister.co.uk/2007/08/08/commissioned_software_royalties/
But it's not simple to sort out legally and might be easier to just learn from your mistake this time around. Lawyers are expensive!
I really don't see the point of keeping code to yourself. People who hire programmers do that because they can not program themselves. You sell skill, not code. Giving code away does not reduce your skill. It will, however build your reputation (provided that it is very poetic, readable, and documented code :-) )
Based on your story (fixed fee, you take the risk), the customer has no right to source. It is different when you get paid by the hour. You want to offer your client escrow, though.
Here is the defining factor, which, oddly, I am not really seeing anyone else commenting on:
WILL THE CLIENT PAY THE MONEY, AND IS IT WORTH IT, OR WILL IT COST YOU MORE IN THE LONG RUN IN LOST BUSINESS/REPUTATION
At the end of the day, the law only matters if you expect to see them in court. Otherwise, what matters is what you, and they, understand the contract to be, and who is willing to compromise, on what, and how.
Well I guess the least I can say is that this has been an enlightening experience for me.
What I take form all of this is that I will have to be much more careful in the future when defining my business relationship with my clients and what my obligations are towards them (and theirs towards me ofc).
As for this project i htink that I will give them the source code for if nothing else I believe I will save face that way.
Thank you all for your time and your great answers on my problem.
IANAL, but keep in mind:
[Giving client a copy of the source code] != [assigning copyright to client]
Unless you have a contract that states that this was a "work made for hire" or it specifically assigns copyright to the client, you are still the copyright owner, even if you physically hand over a copy of the source code.