Legal Foundations Tech Founders Overlook When Building Digital Products

IP Assignment: Who Actually Owns the Code?

When you hire a developer or agency to build your platform, you'd assume the code belongs to you. Often, it doesn't – not automatically. Without explicit IP assignment clauses in your contract, the developer may retain ownership of what they've created. This becomes a serious problem if you're seeking investment, considering acquisition, or simply want to switch providers.

The same applies to designers, copywriters, and any contractor contributing to your product. Logos, illustrations, UI designs, even the words on your homepage – ownership should be formally transferred in writing. "Work for hire" assumptions vary by jurisdiction and don't always protect you.

MVP Contracts: Milestones, Payments, and Source Code

A handshake agreement with a freelancer might work for a landing page. For an MVP costing tens of thousands, you need proper contractual protection. That means milestone-based payments tied to deliverables, clear specifications of what "done" looks like, and crucially – guaranteed access to source code and documentation.

We've seen founders locked out of their own platforms because this wasn't specified. The developer disappears, the relationship sours, or the agency goes under – and suddenly you can't access what you paid for. Your contract should explicitly state that all source code, databases, credentials, and technical documentation transfer to you upon payment.

SLAs: What Happens After Launch?

Service Level Agreements define what support you receive once your platform is live. Response times, uptime guarantees, maintenance windows, escalation procedures – these need documenting before you launch, not when something breaks at 2am. Many founders don't realise ongoing support isn't automatically included in a build contract.

Consider what "support" actually means. Does it cover bug fixes only, or feature requests too? Is there a monthly retainer, or are you paying per incident? What's the guaranteed response time for critical issues versus minor ones? An SLA removes ambiguity and sets expectations for both parties.

Contractor Classification: IR35 and Employment Status

If you're engaging developers, designers, or other specialists as contractors, their employment status matters – legally and financially. IR35 legislation in the UK is complex and fact-specific — get professional advice before engaging contractors.

Website Compliance: The Visible Gaps

Privacy policies, cookie consent, terms and conditions, ICO registration if you're processing personal data – these are legal requirements, not optional extras. They're also the first thing a potential investor or acquirer checks. Missing basics signal broader operational gaps.

GDPR compliance extends beyond your website. If your platform collects user data, you need documented lawful bases for processing, clear data retention policies, and procedures for handling subject access requests. The ICO has issued significant fines to businesses of all sizes – ignorance isn't a defence.

NDAs and Confidentiality: Protecting Your Idea

Before discussing your product idea with potential developers, investors, or partners, consider what you're sharing and how it's protected. Non-disclosure agreements aren't always appropriate – many investors refuse to sign them – but understanding when confidentiality matters helps you share strategically.

For technical discussions with agencies or freelancers, a mutual NDA is reasonable and standard practice. It protects both parties and signals professionalism. Just ensure it's proportionate – overly aggressive terms can deter good partners.

Open Source Licensing: Hidden Obligations

Modern software development relies heavily on open source libraries and frameworks. That's fine – we use Laravel and Vue.js, both open source. But different licences carry different obligations. GPL-licensed code, for example, may require you to release your own source code if you distribute the software.

Before your platform launches, understand what third-party code it contains and what licences apply. Your developer should be able to provide a dependency audit. This matters particularly if you're building a SaaS product or planning an exit – acquirers will ask.

Shareholder Agreements: Before You Scale

If you have co-founders or early investors, a shareholders' agreement defines what happens when things change – someone wants out, you're raising a new round, there's a disagreement about direction. Sorting this early costs far less than sorting it during a dispute.

Key provisions include vesting schedules for founder equity, drag-along and tag-along rights, pre-emption rights on share transfers, and decision-making thresholds for major company actions. These aren't just legal formalities – they're the rules that govern your business relationship.

What We Build at Rocking Tech

We build custom platforms and MVPs for funded founders and growing SMEs – typically £25K+ projects delivered in 8-16 weeks. We're not solicitors, but we understand tech contracts well enough to know when something's missing. Our builds go smoother when clients have their legal foundations in place first.

Planning a platform build? Book a discovery call and let's talk through what you need – technically and commercially.