How to protect the rights of an IT contractor in Ukraine: contract, disputes and court

An IT contractor risks losing payment, copyright or reputation before the first court hearing – if the contract is drafted badly or the response to a dispute is chaotic. Attorney Vitalii Petryk explains how to build legal protection from day one of working with a client.

Key points

• IT work is documented either by a services contract (Article 901 of the Civil Code) or a works contract (Article 837), and the choice determines who bears the risk of an unfinished project.
• Copyright in code, design and algorithms remains by default with the author-contractor (Article 16 of the Law on Copyright and Related Rights).
• Transfer of IP to the client is possible only under a contract with express wording and consideration.
• A signed acceptance act is the key document for recovering payment.
• Disputes up to 100 minimum wages are heard in simplified proceedings (Chapter 12 of the Civil or Commercial Procedure Code).

Which contract protects an IT contractor better?

For most IT projects a services contract (Article 901) offers better protection, because the client pays for the process rather than only for a finished result. Under a works contract (Article 837) the risk of an unfinished result falls on the contractor: if the product is not delivered, there may be no payment. At the same time a works contract suits projects with a clear technical result and stage-by-stage funding.

For long-term retainers and iterative development a services contract usually protects the contractor more effectively. The final choice depends on the project and on the arrangements with the client.

Copyright in code: who owns it by default?

By default, the contractor. The Law of Ukraine on Copyright and Related Rights (Article 16) provides that economic rights in a work belong to the employer only where the author is a full-time employee under an employment contract. If you are a sole trader or an individual working under a civil law contract, the copyright stays with you.

For IP to pass to the client the contract must say so expressly, specifying the scope of rights (exclusive or non-exclusive licence), the term, the territory and the amount of additional remuneration for the assignment. Without such a provision the client cannot lawfully resell or license the product to third parties, even if it paid for it in full.

Which contract terms must protect the contractor?

Before signing, pay attention to the following clauses:

• Payment procedure and deadlines – specific dates or linkage to events (signing of an act, reaching a milestone).
• Acceptance – a detailed description of acceptance criteria and the period for the client to review. Under Article 853 of the Civil Code the client silence amounts to acceptance.
• Confidentiality – what exactly the NDA covers, for how long and what follows a breach.
• Limitation of liability – a cap on liability protects the contractor from disproportionate claims.
• Force majeure – the list of circumstances and the notification procedure. Ukrainian contracts should take martial law into account.
• Jurisdiction – where and under which law a dispute will be heard.

The client is not paying: a step-by-step algorithm

1. Send a written demand with a specific deadline for reply (7-14 days). Record the dispatch: email with delivery confirmation, registered letter or a messenger message with a screenshot.
2. If there is no reply, prepare a statement of claim. For individuals it is the local general court (Civil Procedure Code); for sole traders and legal entities it is the commercial court (Commercial Procedure Code).
3. For amounts up to 100 minimum wages simplified claim proceedings apply, without summoning the parties to the courtroom.
4. In parallel gather evidence: correspondence, technical specification, acts, screenshots of the work performed, payment documents.

Do not delete any correspondence with the client. Informal messages in Telegram, Slack or Viber can become decisive evidence in court.

When a civil dispute may become criminal

Some situations go beyond civil relations:

• The client deliberately misled the contractor about payment terms or its financial position – this may qualify as fraud (Article 190 of the Criminal Code).
• Someone uses or reproduces your code or product without authorisation – infringement of copyright for profit (Article 176).
• Access to your system or repository was obtained without your permission – unauthorised interference (Article 361).

In such cases you should consult a lawyer before filing anything, in order to choose the right legal mechanism and avoid harming your own position.

Frequently asked questions

Is it necessary to register copyright in code?

No. In Ukraine copyright arises automatically from the moment a work is created (Article 11 of the Law on Copyright). Registration is not mandatory, but it makes proving authorship in a dispute considerably easier.

What if the client refuses to sign the acceptance act?

Send the act by post or email and set a written deadline for comments (5 working days). If the client stays silent, under Article 853 of the Civil Code this amounts to acceptance. Document the fact of dispatch.

Can I recover a penalty for late payment?

Yes, if a penalty or fine is provided for in the contract. If not, Article 625 of the Civil Code applies: 3 per cent per annum of the debt plus inflation compensation. A contractual penalty accrues only on a contractual basis.

The client is in another country – where do we litigate?

It depends on the contract. Without a jurisdiction clause, disputes between individuals are decided at the defendant place of residence (Article 28 of the Civil Procedure Code). In international contracts it is advisable to specify arbitration or a particular jurisdiction.

When should I involve a lawyer – only when going to court?

Better at the negotiation and contract stage. Most problems arise from terms that look harmless at signing but turn into traps in a dispute.

Need advice on protecting the rights of an IT contractor?

Attorney Vitalii Petryk provides legal assistance in IT law and criminal defence for entrepreneurs and digital economy professionals.

• Phone: +38 (096) 878-07-36
• Email: info@advokat-petrik.com
• Address: Kyiv, Holosiivskyi Avenue 132, RELE Business Centre

This article is informational and is not legal advice. To assess your specific situation, contact an attorney.