Since you said this:
(snip)Since this is a normal model of software development you would have to be very specific and say "You will fund the development and I will grant you a license to use it" if you wish to depart from the norm.
it is dissappointing you would say this:
However in practical terms you have a lot of power as the sole coder, and you can probably leverage that to your advantage (maybe on a maintenance contract or something).
Some gentle code obfuscation would probably help your position later on as well.
Nowhere does the poster say if feels tricked or cheated. If the answer to "Does it matter?" wasn't "Yes it does; it affects the price." then I don't see the problem. He should talk to the person, or better yet an attorney (to write a contract, not sue) and get it resolved. I know I wouldn't appreciate being on the receiving end of obfuscated code because my programmer *thought* I might be taking advantage of him.
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