Legal
Work-for-Hire Agreement
Also known as: Work-made-for-hire, contractor IP assignment
A contract specifying that creative or intellectual work produced by a contractor belongs to the company that commissioned it. Without one, the contractor may own the IP.
WHY IT MATTERS
When a company hires a contractor to create something — a logo, a website, marketing copy, custom software — ownership of the resulting work is not automatic. Without a work-for-hire agreement or IP assignment clause, the contractor may retain copyright. The founder assumes they paid for it, so they own it. Copyright law disagrees. During diligence, the buyer's legal team audits IP ownership. If the company's logo was designed by a freelancer in 2015 and no assignment was executed, the buyer is acquiring a business that may not own its own brand identity. The fix is an IP assignment — a simple document the contractor signs transferring ownership to the company. Done at the time of the engagement, it costs nothing. Done during diligence, it costs leverage: the contractor knows the company needs the assignment to close a deal, and the price goes up. Buyers who discover unassigned contractor IP add indemnity provisions and purchase price reductions.