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Hiring a software developer means commissioning something that does not exist yet, which makes it different from every other technology purchase. There is nothing to trial, the specification is written by people who cannot yet see the thing they are describing, and the result is judged against expectations that change as it takes shape. Typical engagements include an internal tool that replaces a spreadsheet several people fight over, a customer-facing web application, an integration that makes two systems finally exchange data, or the modernization of something written years ago by a person who has long since left.

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The single thing buyers most often get wrong is ownership. Under the Copyright Act the author of a work is the first owner of the copyright in it, and the exception for works made in the course of employment applies to employees under a contract of service, not to an agency or a contractor you engaged. Paying an invoice does not by itself move copyright. An assignment is not valid unless it is in writing signed by the owner of the right or their authorized agent, so without a signed assignment the developer can retain copyright in the software you paid to have built.

Software development is also unlicensed in Canada. Nobody needs a permit to write code commercially, and no regulator maintains a register of development firms. What protects you is the contract, the handover, and a clear view of who owns what.

Kinds of custom software engagement

  • Internal line-of-business tools that replace spreadsheets or manual processes for a specific team.
  • Customer-facing web applications, including portals where clients log in to see their own information.
  • Integration work connecting systems that were never designed to talk to each other, often through their interfaces.
  • Data migration from a legacy system, which is frequently harder and slower than building the new features.
  • Modernization of an existing application that still works but can no longer be safely changed.
  • Ongoing maintenance and support retainers covering fixes, dependency updates and small enhancements after launch.
  • Staff augmentation, where developers join your existing team and your people direct the work.
  • Discovery-only engagements that produce a specification, estimate and technical plan you can take to any builder.

Who owns the code: copyright, assignment and moral rights

Section 13(1) of the Copyright Act states that the author of a work is the first owner of the copyright in it. Section 13(3) gives first ownership to the employer where the author made the work in the course of employment under a contract of service, absent an agreement to the contrary. An independent development firm is not your employee, so that exception does not apply, and section 13(4) requires that no assignment or grant is valid unless it is in writing signed by the owner of the right or their duly authorized agent. Software is protected as a literary work, which the Canadian Intellectual Property Office confirms in listing computer programs among the literary works copyright covers.

The practical implication is that a quote, a purchase order and a paid invoice do not transfer copyright. You need a signed assignment, and it should be explicit about what it covers: the source code, the build and deployment scripts, the database design, the documentation and the design assets. Alternatively a licence may be appropriate, where the developer keeps ownership and grants you defined rights to use and modify the software. Both are legitimate; what causes trouble is not knowing which one you have.

Moral rights sit separately and survive an assignment. CIPO explains that moral rights cannot be assigned or transferred but can be waived, covering the rights of integrity, attribution and association, and that once waived they cannot be reacquired. This matters more than it sounds for software that will be heavily modified later by other people. Assignments can also be registered with CIPO, which keeps a record of the documentation and returns a certificate of registration. This is general information, not legal advice: have a lawyer draft or review the intellectual property terms on anything substantial.

Third-party libraries and what your assignment does not cover

Almost no custom software is written entirely from scratch. A typical application assembles dozens or hundreds of third-party and open-source components, and the developer cannot assign to you rights they never owned. Your assignment covers what they wrote; everything else reaches you under the terms of whoever published it, and those terms vary from near-unrestricted to conditions that attach obligations when software is distributed.

Ask for an inventory of third-party components and their licences as a deliverable, refreshed at handover rather than written once at the start. It is an ordinary request, it is generated automatically by standard tooling, and a developer who resists it is telling you something. The inventory also becomes your starting point for security, since a vulnerability in a widely used component is one of the most common ways otherwise well-built applications become exposed.

Commercial components deserve particular attention. If the application depends on a paid library, a hosted service or a subscription, establish whose name that agreement is in, what happens when it renews, and whether the software still functions if it lapses. The same applies to any proprietary framework the developer reuses across clients: you may be licensing it rather than owning it, which is workable if you know, and unpleasant if you discover it while trying to move to another firm.

From discovery to launch

  • Discovery: interviews, current-process mapping and a written statement of what the software must do and for whom.
  • Specification and estimate: user stories or requirements detailed enough that two firms would quote against them comparably.
  • Design: interface wireframes and data model, agreed before substantial building starts.
  • Iterative build with working software demonstrated at regular intervals, so misunderstandings surface while they are cheap.
  • Your acceptance testing against the agreed requirements, done by the people who will actually use the software.
  • Data migration and a rehearsal of the switchover, including what happens if it has to be reversed.
  • Launch and a defined warranty window during which defects against the specification are fixed without further charge.
  • Handover of code, credentials, documentation and the component inventory, ideally continuous rather than a final event.

Accessibility obligations for public-facing software

If the software will be used by the public, accessibility may be a legal requirement rather than a refinement. In Ontario, designated public sector organizations and businesses or non-profits with 50 or more employees must make their websites and web content conform to WCAG 2.0 Level AA, with exceptions for live captions and pre-recorded audio descriptions. The requirement applies to content published after 1 January 2012 and the compliance date has passed, so this is an existing obligation rather than a future one for organizations of that size.

Accessibility is dramatically cheaper to build in than to retrofit, because it affects markup structure, colour and contrast choices, keyboard navigation, form labelling and error handling — decisions made early and expensive to revisit once an interface is complete. Put the conformance target in the specification, ask how the developer tests against it, and ask for the result as a deliverable. A firm that treats accessibility as an optional extra at the end has usually not built it before.

Requirements differ across the country and by sector, so confirm what applies to your organization where it operates and to the audiences it serves. This is general information, not legal advice. Note also that internal-facing tools are treated differently from public websites in Ontario's rules, which does not make inaccessible internal software a good idea when your own staff need to use it.

Repository access, escrow and what handover must include

Ask for repository access from the first day rather than at the end. The cleanest arrangement is a source control organization owned by your business, with the developer's accounts added to it, so the work accumulates somewhere you control and you can see progress. Where the developer hosts the repository, agree in writing how and when you get a complete copy, and take one periodically instead of trusting a final delivery that may coincide with a disagreement.

Source code escrow, where a third party holds a copy released to you if agreed conditions occur, is a reasonable alternative when the developer will not give direct access, and it is more common with product vendors than with custom builds. It is not a substitute for ordinary access, since escrowed code without documentation, build scripts and deployment knowledge can be difficult for anyone else to use.

Handover should include the source code, build and deployment instructions, environment configuration, the third-party component inventory, database schema and migration scripts, administrative credentials, and hosting and domain accounts registered in your name. Ask specifically whether another competent developer could take this package and deploy the application without contacting the original firm. If the honest answer is no, the handover is incomplete regardless of what was delivered.

Frequent failures in custom software projects

  • No signed assignment, so copyright in software the business paid for and depends on remains with the developer.
  • Hosting, domain and third-party service accounts registered in the developer's name rather than the client's.
  • Requirements that grow steadily without any change process, until the budget and the timeline stop meaning anything.
  • No automated tests and no documentation, making every later change slow, risky and expensive to quote.
  • One developer holds all the knowledge, and the project stops when they are unavailable.
  • Acceptance testing done by the person who commissioned the software rather than the staff who will use it daily.
  • Dependencies never updated after launch, so known vulnerabilities in third-party components accumulate quietly.
  • A demonstration built on prepared data that has never been tested against the organization's real, messier records.

After launch: updates, security and who is on call

Custom software is not finished at launch; it needs someone to keep it running. Third-party dependencies release security updates, platforms and browsers change, and an application left untouched becomes harder to update the longer it is neglected, because the gap between its components and current versions widens. The Cyber Centre's baseline controls include applying patches to operating systems and applications, and meeting recognised security standards for web applications, which for a public-facing application is ongoing work rather than a launch checklist item.

Agree what happens after the warranty period ends. A maintenance arrangement typically covers dependency and security updates, monitoring and uptime, backups and tested restores, and a defined response when something breaks, with new features quoted separately. Be clear which of those you are buying, since agreements described as maintenance sometimes cover only defects in the original build and leave security updates to nobody.

Ask how you would be told about a security issue in a component your application relies on, and who decides when an urgent update is applied. Where the application stores personal information, that judgement connects directly to your safeguards obligations, which require protection appropriate to the sensitivity of the information and expect the approach to be revisited as technologies evolve and new risks emerge.

Software Developers: frequently asked questions

Do we automatically own software we paid a developer to build?

Not automatically. The Copyright Act makes the author the first owner of copyright, and the exception giving ownership to an employer applies to employees under a contract of service, not to an independent firm you engaged. An assignment is only valid if it is in writing signed by the owner of the right or their authorized agent. Without that signature, the developer may still own copyright in software your business paid for and depends on. This is general information, not legal advice.

Is a purchase order or an invoice enough to transfer copyright?

No. The requirement is a written assignment signed by the copyright owner or their duly authorized agent, so a payment record does not accomplish it. The assignment should also state what it covers, since source code, build scripts, database design, documentation and design assets are separate outputs. A licence granting you defined rights while the developer keeps ownership is a legitimate alternative, but you should know which arrangement you have before the relationship ends.

What are moral rights and do they affect custom software?

Moral rights cover integrity, attribution and association, and they belong to the author personally. CIPO explains they cannot be assigned or transferred but can be waived, and once waived they cannot be reacquired. For software that other developers will substantially modify over the years, a waiver is commonly included alongside the assignment. Raise it while the agreement is being drafted rather than years later when the original author is no longer involved.

Should we get the source code, and what is escrow?

Yes, and preferably through repository access from the start in an organization your business owns, rather than a single delivery at the end. Escrow is an arrangement where a third party holds a copy of the code and releases it to you if agreed conditions occur, such as the developer ceasing to trade. It is a fallback rather than a replacement for access, because code alone without build instructions, environment configuration and documentation is hard for a new developer to pick up.

Does our web application have to be accessible?

Often, yes. In Ontario, designated public sector organizations and businesses or non-profits with 50 or more employees must make websites and web content conform to WCAG 2.0 Level AA, excepting live captions and pre-recorded audio descriptions, for content published after 1 January 2012. Requirements vary elsewhere in Canada and by sector, so confirm what applies to your organization. Build the target into the specification either way, because retrofitting accessibility into a finished interface is far more expensive than designing for it.

What happens to open-source components in the software?

They reach you under the terms set by whoever published them, and the developer cannot assign rights they never held. Your assignment covers the code the developer wrote. Ask for an inventory of third-party components and their licence terms as a deliverable at handover; standard tooling generates it automatically. That inventory is also what you will need when a vulnerability is announced in a widely used component and someone has to determine whether your application is affected.

How does LokalMatch work for software development?

You outline what you want built, the problem it solves and any systems it has to work with, and software developers covering your area contact you to discuss scope and approach. LokalMatch does not review anyone's code, verify portfolios or rank development firms, so use the ownership, handover and component questions above when you compare proposals, and get the intellectual property terms reviewed by a lawyer before signing.

Sources

  1. Copyright Act, section 13 (ownership of copyright and assignments)
  2. A guide to copyright (Canadian Intellectual Property Office)
  3. Transfer ownership of a copyright (Canadian Intellectual Property Office)
  4. How to make websites accessible (Government of Ontario)
  5. Baseline cyber security controls for small and medium organizations (Canadian Centre for Cyber Security)
  6. PIPEDA Fair Information Principle 7 – Safeguards (Office of the Privacy Commissioner of Canada)

Written by the LokalMatch editorial team. Last reviewed September 14, 2026. How we write and check our guides

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What affects the fees software developers charge

Fees depend on the work involved and how the professional bills. We only publish fee ranges when they’re backed by real LokalMatch data or reliable sources. Until then, here’s what usually changes the fee:

  • Scope and complexity of the work
  • How the firm bills: hourly, per project or on a monthly retainer
  • Experience of the team
  • Timeline and how urgent the work is
  • Ongoing support after the work is delivered

How to compare software developers before you hire

  • Ask for examples of similar work for clients like you.
  • Read reviews and ask for references you can contact.
  • Make sure the scope, deliverables and timeline are written down before work starts.
  • Ask who will do the work: an in-house team, freelancers or subcontractors.
  • Compare two or three proposals before you decide.

Questions to ask software developers before you hire

  • Have you done work like this before, and can I see examples?
  • Who will work on this, and who is my main contact?
  • How do you charge: hourly, per project or monthly?
  • What is included, and what costs extra?
  • How long is the contract, and how can either side end it?
  • How will you report on progress?
  • Who owns the work, files and accounts you set up for me?

Licences and registration

This kind of work is often limited to licensed or registered professionals, and the rules depend on where you are. Ask which body they’re registered with, and check their status on that body’s public register before you hire.

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