IT Glossary
What is source code?
The text written by programmers from which an application is produced — the recipe of the software; whoever owns it controls the product.
The application you use is the cake; the source code is the recipe — the text written by programmers, from which the executable program is baked. The distinction looks academic right up until the first parting of ways with a supplier: whoever holds the recipe can modify, repair and develop the product further, while whoever holds only the cake can, at best, eat it. Hence the genuinely important question about any custom-built software: who owns the source code, and where does it live? A healthy contract either assigns the rights and hands over the code — ideally with continuous access to the Git repository rather than a zip file on a memory stick at the end — or at minimum grants a broad licence plus an escrow arrangement in case the supplier disappears. With off-the-shelf software you do not get the code, and that is entirely normal. With bespoke development you paid for, the absence of these clauses means you are financing a product you do not legally control. Check it before signing; afterwards, your negotiating position has evaporated.
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Why it matters for your business
Freedom to change supplier
With the source code and its documentation, any competent team can take over development — the relationship with your supplier stays a choice rather than a captivity.
A real company asset
Software whose code you own is valuable intellectual property, and it counts in fundraising, in a sale of the business and in financing conversations.
Guaranteed continuity
A supplier going bankrupt or simply disappearing does not bury the application your business runs on — the recipe is either with you or in an escrow you can trigger.
Frequently asked questions
I paid for the development — is the source code automatically mine?
No. Absent an express clause, copyright normally remains with the developer; paying the invoice does not transfer intellectual property. Ask explicitly for assignment of the economic rights and for handover of the code together with its full history.
What is source code escrow?
An arrangement where the code is deposited with a trusted third party and released to you in defined situations, such as the supplier's insolvency or the end of support. It is the standard answer when a supplier will not assign the code to their own product but you depend on it critically.
How do I verify that I received all of the source code and not part of it?
The definitive test: can an independent team build a working application from what was handed over? Ask for documented build instructions at handover and, ideally, a supervised trial build. An archive nobody can compile is a handover in name only.
Let’s talk about your project
Message us on WhatsApp or send an email — you talk directly to a developer.
office@northdan.com · +40 752 070 247