Selling source code, What should I be aware of

Question

I have received a request of buying the source code of a website I have developed and I wondered if anybody have been in the same situation and if there is anything I should specially be aware of. Anybody got some advise on how I should handle this situation?

Answer 1

The first thing you need to consider is:

What license are you providing the code under?

If you don't stipulate a license, they're pretty much free to do with it what they want. Is that what you want? It's hard to answer the question without knowing the specifics of the situation: why are you selling the source code?

If this is a customer and so it's they can do their own custom modifications that you were otherwise being paid to do, the price should reflect that "lost work". Also, you will want to limit their ability to redistribute or resell that source code.

If someone just likes your site and wants the code, be very wary because there's every chance they'll just take it and set up their own. This may or may not be an issue for you. But again consider the issues of resale, redistribution, usage rights and ownership.

Depending on what the code is for, you may also want to consider what it is used for, what it can be used for and how that will affect you professionally or otherwise. It's possibly you may want to restrict the code from being used for certain things (eg adult or poker sites) or you want to require attribution.

Also for all of these things, you need to consider what terms transfer in the event of redistribution (ie how "viral" your license is).

There are lots of open source licenses out there (GPL, Apache, MIT, BSD, MPL, LGPL, etc). I'd suggest you take one as a basis and modify it to suit your tastes. You're far less likely to get in trouble that way than you are with coming up with your own terms.

Answer 2

First - a caveat - I'm not a lawer. Not at all. But I care alot about intellectual property and not getting sued, so I try to learn about it a bit.

In no particular order:

• Double check your employment rules - when you took the job currently paying you money, what is your arrangment? Did you have to sign any statements giving your company control over all the code you produced? Even if it was a personal, unpaid project - corporate ownership can get you if you signed a strict intellectual property agreement.
• Used open source? - there are a few main open source licenses, read through and check them to see the terms for sale of a product with dependancies on open source.
• What deliverables does buyer expect? - Built code? source code? Also - what can you do to protect your code (obfuscation).
• Do they expect support? - be careful, in my experience with corporate customers, a helpful, free of charge "sure, just call me if you have a quick question" can quickly become time consuming. If you are willing to throw in a free couple hours, be very clear that you will give up to X hours of support for free. And be clear about what your billing rate is after. If you really don't want to support it, make the cost of your time very high.
• What sort of support do they want? - answers & configuration help? Bug fixes?
• What sort of installation instructions are expected?
• What do they own when they buy this? - a single installation for a single server? a site-wide license to install it wherever they wish? or --- worst case -- do they own this lock, stock and barrel such that you may no longer develop it and continue to use it yourself?

Get these answers cleared up, in writing, with signatures.
It's a good idea to have someone external read it to check for ambiguity. It's an even better idea to draw up the agreement and have a lawyer read it - your lawyer, not the buyer's lawyer.

Avoid any nod/wink/handshake deals. Personal trust is great, but people change if the situation becomes stressful. Or people come and go within companies - the buyer today may be a different person tomorrow.