The Default Rule Most People Get Wrong
Here is the misunderstanding that causes more freelance disputes than anything else: clients assume they own the work because they paid for it. Freelancers assume the client owns it because they were hired to create it.
In most jurisdictions, neither assumption is automatically correct.
The default rule under copyright law in the United States is that the creator owns the copyright. When a freelancer creates a design, writes code, produces a video, or writes copy — the freelancer owns it by default, not the client. The exception is works created by an employee within the scope of their employment, or certain categories of commissioned works with a written "work-for-hire" agreement.
If there is no contract, or if the contract does not address IP, the freelancer typically retains ownership and the client has an implied license to use the work for the purpose it was created — but nothing more.
What "Work-for-Hire" Actually Means
Work-for-hire is a legal doctrine with a specific meaning. Under US copyright law, a work is a work-for-hire if:
- It was created by an employee within the scope of their employment, or
- It falls into one of nine specific categories of commissioned works AND there is a written agreement stating it is a work-for-hire
The nine categories include contributions to collective works, parts of a motion picture, translations, supplementary works, compilations, instructional texts, tests, answer material for tests, and atlases.
Notably, software development and graphic design are not on the list. This means that even if a contract calls a freelance project a "work-for-hire," it may not be legally enforceable as such for those categories.
The practical solution — and the standard approach in professional freelance contracts — is to include an explicit IP assignment clause rather than relying on work-for-hire language.
The IP Assignment Clause
An IP assignment clause explicitly transfers ownership of the work from the freelancer to the client. A well-drafted clause will:
- Assign all copyright, including moral rights where applicable
- Cover work created specifically for this project, not pre-existing work or general tools the freelancer uses
- Specify when the transfer takes effect — typically upon receipt of full payment
The "upon full payment" condition is critical for freelancers. It means that if a client does not pay in full, ownership does not transfer. The client cannot use the final deliverables without completing payment.
Pre-Existing Work and Background IP
A freelancer often brings existing code libraries, design assets, templates, or tools to a project. These are called "background IP" and should not be assigned to the client — they are the freelancer's professional toolkit used across many projects.
Your contract should distinguish between:
- Custom work created specifically for this client (assigned to the client upon payment)
- Pre-existing materials incorporated into the deliverables (licensed to the client, but retained by the freelancer)
For example, a developer who uses a proprietary framework they built for their own business should license that framework to the client for use in the project, not assign ownership of it.
Portfolio Rights
Clients often want the freelancer to keep the work confidential, especially for unreleased products. Freelancers, understandably, want to show the work in their portfolio.
The standard compromise: the freelancer can display the work in their portfolio after the client has publicly launched it, or after a specified embargo period. This is a reasonable ask and most clients will accept it. If confidentiality is a serious concern, it should be addressed in a separate NDA.
Protecting Yourself on Both Sides
If you are a freelancer: use a written contract with a clear IP assignment clause triggered by full payment. Do not rely on handshake agreements or email threads.
If you are a client: do not assume you own the deliverables unless your contract explicitly says so. Verify the IP assignment clause before signing.
TermsDock's Freelance Contract Generator includes a full IP assignment clause — intellectual property transfers to the client upon receipt of full payment, with a clear carve-out for pre-existing materials.