A guide for independent contractors, consultants and freelancers in Canada: how to sign a client agreement without handing over the tools, code, designs and methods you already own, the side projects you build on your own time, or the work you do for other clients — with sample clause language to ask for.
Updated October 2026. Written by Koby Smutylo, business lawyer, Smutylo Law+. This guide covers federal copyright law, which applies across Canada, and the common-law rules on inventions. It is general information, not legal advice.
Copyright. Under section 13(1) of the Copyright Act, the author of a work is its first owner. Section 13(3) gives the employer the copyright in work made by an employee in the course of employment, but it applies only to a “contract of service” — employment — and not to a contractor working under a contract for services. Section 13(4) then says no assignment or licence of copyright is valid unless it is in writing and signed by the owner. Code, written reports, designs, drawings, photographs, course materials and marketing copy are all covered.
Inventions and patents. The Patent Act does not say who owns an invention made for someone else. The courts start from the position that the inventor owns it, with an exception where the person was hired to invent — the eight-factor approach in Comstock Canada v. Electec Ltd. (1991), 45 F.T.R. 241 (F.C.T.D.), which has been applied to contractors as well as employees. An express term in the contract overrides the presumption, which is why client agreements include one.
Moral rights. You also hold moral rights — the right to be credited and the right to the integrity of the work. Under section 14.1 they cannot be assigned, only waived, and assigning the copyright does not waive them.
US templates. Many client agreements are written for US law and call everything a “work made for hire.” Under 17 U.S.C. § 101, work by a non-employee is a work made for hire only if it falls into one of nine listed categories and the parties sign a written agreement saying so; most software, consulting and design deliverables are not in those categories. Canadian copyright law has no work-for-hire category for contractors at all. So these templates add a backup clause — “to the extent any work is not a work made for hire, Contractor hereby assigns…” — and that backup clause is usually the broadest language in the document. Read it as the operative clause.
The practical result: the default rules favour you, and nearly everything turns on what you sign. A client agreement that is silent leaves you owning more than the client expects. A client template that is drafted broadly can take more than you intend to give.
Most disputes start with an agreement that puts everything you touch in one category. A well-drafted agreement separates three.
| Category | What it is | Who should own it |
|---|---|---|
| Background IP (pre-existing IP) | What you owned or developed before the engagement: code libraries, templates, frameworks, tools, design systems, training materials, methods, and any project you had started. | You. The client gets a licence to use whatever is built into the deliverables. |
| Deliverables (foreground IP) | The work product the client is paying for, as described in the statement of work. | The client, once it has paid for it. |
| Independent work | What you create outside the engagement: your own products and side projects, and work for other clients, made without the client’s confidential information or resources. | You, or your other clients — even if it is in the same field. |
A fourth item sits between them: your general skill and experience, including what you learn on the job. Every contractor carries it from one client to the next, and a well-drafted agreement says so.
These are the phrases to look for in a client template. Each one can reach past the deliverables.
| Look for | What it can do | Ask for |
|---|---|---|
| “All work product created during the term” | Captures side projects and other clients’ work, because the test is timing, not the engagement. | “Deliverables under a statement of work.” |
| “Relating to the Client’s business or anticipated business” | Reaches anything in your field, including work for a competitor of the client that you were free to take on. | Delete, or limit to work made in performing the services. |
| “Including all improvements and derivatives” without a background-IP carve-out | Transfers your library or framework once you improve it on the client’s project. | Improvements to background IP stay background IP, unless they contain client confidential information. |
| “Contractor hereby assigns… upon creation” | Transfers ownership before you are paid, so a client that never pays still owns the work. | Assignment effective on payment in full for that deliverable. |
| A “prior inventions” schedule left blank, or a statement that you have none | Can be read as your confirmation that nothing you bring in is yours. | Fill in the schedule, by category if need be. |
| Anything conceived within 12 months after the term is presumed to be the client’s | Puts the burden on you to prove a later project is independent. | Delete. |
| Irrevocable power of attorney to sign IP documents in your name | Lets the client register rights in your name with no limit on subject matter. | Limit to the deliverables, and to cases where you fail to sign within a stated period. |
| Confidential information defined to include “all information the Contractor develops” | Turns your own know-how into the client’s secret, so you cannot use it again. | Standard exclusions, including information you develop independently. |
| Exclusivity, or a non-compete covering your field | Stops the other work your IP depends on. | A non-solicit plus confidentiality; see when non-competes are enforceable in Canada. |
The sample wording below shows the structure of each protection. It is illustrative — it has to be fitted to the defined terms, numbering and governing law of the agreement in front of you, and a client’s lawyer will have their own preferred wording. Where a client is likely to push back, a fallback position follows.
Everything else in the IP section hangs off this definition. Tie it to the statement of work, and exclude the other two categories by name.
“Deliverables” means the work product expressly identified as a deliverable in a Statement of Work and delivered by the Contractor to the Client under that Statement of Work. Deliverables do not include Background IP or Independent Work.
Define it broadly, list it in a schedule, and say in plain terms that it is not transferred.
“Background IP” means all intellectual property that the Contractor owned, licensed or developed before the Effective Date, or develops after the Effective Date other than in performing the Services, including the items described in Schedule A, together with all modifications and improvements to it that do not incorporate the Client’s Confidential Information.
The Contractor retains all right, title and interest in the Background IP. Nothing in this Agreement assigns or transfers any Background IP to the Client.
If they push back: a client may want the improvements made on its project. You can agree that client-specific modifications form part of the deliverables, while general-purpose improvements to your tools remain background IP.
The client’s legitimate concern is that it can use what it paid for without coming back to you. A licence answers that without a transfer.
To the extent any Background IP is incorporated into a Deliverable, the Contractor grants to the Client a non-exclusive, perpetual, irrevocable, worldwide, royalty-free licence to use, copy, modify and distribute that Background IP solely as part of, and as necessary to use and maintain, that Deliverable. The Client may transfer this licence only together with the Deliverable.
If they push back: clients sometimes ask for the right to sublicense to affiliates and service providers. That is usually reasonable if it stays tied to the deliverable.
This is the clause most client templates leave out. Without it, a broad assignment can be argued to reach whatever you build while the agreement is in force.
“Independent Work” means any work, invention or material that the Contractor creates (a) outside the scope of the Services, and (b) without use of the Client’s Confidential Information, equipment, systems or facilities. Independent Work includes work for the Contractor’s other clients and the Contractor’s own projects, whether or not it relates to the Client’s business. The Client acquires no right, title or interest in any Independent Work.
If they push back: a client worried about a specific competing product may ask you to disclose related side projects. Listing them in Schedule A, or giving notice before you start one in the client’s exact product area, is a narrower concession than giving up the carve-out.
Effective on the Client’s payment in full of the fees for a Deliverable, the Contractor assigns to the Client all right, title and interest, including copyright, in that Deliverable. Until then, the Client has a non-exclusive licence to use the Deliverable for the purpose of reviewing and accepting it.
If they push back: some clients need ownership on creation, for example where deliverables go straight into a product release. A middle position is an assignment on creation that reverts, or a licence that terminates, if an undisputed invoice is not paid within a stated period.
Nothing in this Agreement restricts the Contractor from using the general knowledge, skills, experience, ideas, concepts, techniques and know-how retained in the Contractor’s unaided memory, including those acquired in performing the Services, provided that the Contractor does not disclose the Client’s Confidential Information or infringe the Client’s rights in the Deliverables.
This Agreement is non-exclusive. The Contractor may provide services to others during and after the Term, including to businesses in the Client’s industry, provided that the Contractor complies with its confidentiality obligations under this Agreement.
Clients need a waiver so they can edit and adapt the deliverables without your consent. It does not need to cover anything else.
The Contractor waives, in favour of the Client and its successors, assigns and licensees, the Contractor’s moral rights in the Deliverables. This waiver does not apply to Background IP or Independent Work.
Once a Deliverable has been made public by the Client, the Contractor may identify the Client as a client and display or describe the Deliverable in the Contractor’s portfolio, except for any material the Client designates in writing as confidential.
At the Client’s request and expense, the Contractor will sign the documents reasonably required to record the Client’s ownership of the Deliverables. If the Contractor does not sign within 15 business days of a written request, the Client may sign them as the Contractor’s attorney, solely for that purpose and solely in respect of the Deliverables.
You do not have to disclose source code or trade secrets to list them. A description by category, with a version or date, is usually enough to show what existed before the engagement:
Add a catch-all — “and any other materials owned by the Contractor before the Effective Date” — but do not rely on it alone. A specific list is much easier to prove.
Frame the changes around what the client needs. Its legitimate interests are clean title to the deliverables it pays for, the ability to use and maintain them without coming back to you, and protection of its confidential information. The changes above give it all three. What they take away is ownership of things the client did not pay for and would rarely want: your toolkit, your other clients’ work and your own products.
Send the requested wording in writing, as tracked changes or as a short list, and offer the trade that makes the request easy to accept: a full assignment of the deliverables on payment, a broad licence to the background IP built into them, and a warranty that you own or have the right to license that background IP. Larger clients often have an approved fallback for background IP already. If a client insists on owning your background IP outright, that is a sale of an asset you will not be able to use again, and it should be priced as one.
The wider set of terms worth negotiating — payment, liability caps, termination, governing law — is covered in what to look for in an independent contractor agreement. If you are a business engaging contractors, the other side of the same issue is in the independent contractor checklist.
Not by default. In Canada you own the copyright in what you create as a contractor unless you assign it in a signed writing. The risk is a client assignment clause that covers “all work product created during the term” or anything “relating to the client’s business.” Narrow the assignment to deliverables under the statement of work, add an express carve-out for independent work, and build the side project on your own time, equipment and accounts without the client’s confidential information.
Background IP (also called pre-existing IP) is the intellectual property you owned or developed before the engagement, or develop outside it — code libraries, templates, frameworks, tools, methods and existing projects. A contractor-friendly agreement says you keep it and gives the client a non-exclusive licence to use whatever is built into the deliverables.
It is not legally required, but it is strongly advisable. A schedule listing your background IP by category, with a date or version, makes ownership much easier to prove later. You do not need to disclose source code or trade secrets; a general description is usually enough. Do not sign a “prior inventions” schedule that is blank or says you have none if that is not true.
Yes, if the agreement reserves them as background IP and licenses rather than assigns them to the client. If the agreement assigns “all work product” with no carve-out, the client may argue that the library — or the version you improved on its project — now belongs to it. Settle this before you sign.
Not unless the agreement says so or you used the client’s confidential information to create it. Look for assignment clauses tied to the client’s “business or anticipated business,” and for exclusivity and non-compete clauses, which restrict the work itself. A non-exclusivity clause confirming you can work for others in the industry is a reasonable request.
Canadian copyright law has no work-made-for-hire rule for independent contractors; ownership transfers through a written, signed assignment. Even under US law, work by a non-employee qualifies only in nine listed categories with a signed agreement. That is why US templates include a backup assignment clause, and that clause is the one to negotiate.
On payment, if you can get it. An assignment that takes effect on creation means a client who never pays still owns the work. The usual compromise is an assignment effective on payment in full for each deliverable, with a limited licence to use the work during review.
The Patent Act does not answer it. Courts start from the position that the inventor owns the invention, unless the person was hired to invent or a contract says otherwise. Most client agreements say otherwise, so the same narrowing — deliverables only, background and independent work excluded — matters for inventions as much as for copyright.
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