So here's what I'm putting up with for the last 6 months, clients..

A client proposed to me a project he had in mind. Project is pretty solid, could have a bright future. Since they didn't have the money to spend, we agreed on a % of the income they will earn from the project. So, let's say I get 20% of the income in exchange for building the application. I didn't receive any down payment or payment of any kind.

Just for info, project is a Web application/portal and it is ~80% done at the moment. Client provided a logo and a wireframe/ideas/pictures how he sees the project. I built everything, from DB to Frontend. Also, project is completely custom made, no CMS or anything. Project will make profit by subscription base, every user of the project pays.

For various reasons, we did not yet sign a contract. So, what is my issue...

Client sent me his proposal of the contract, said it's solid stuff, just sign it. In the contract, it stated that he owns the application in full, can sell it, etc. and I get % of the price. There were also other sneaky parts about me having all the responsibility but owning nothing. I naturally declined and took a lawyer to construct a normal contract.

My proposal was/is, I own the application(source code) in full. They are obligated to pay the monthly percentage and can use the application normally and make profit. At any time, application can be bought by the client if they pay for the development. So, basically, they are getting the application to use "for free" with no initial payment/investment. And this is a long term deal, they can use is as this as long as they want. Also, if they go bankrupt at any time, no penalty or payment is needed, the risk is mine.

The client refused and what he claims is the following...

His share in the project is 80%, mine is 20%. If project is to be sold, I get 20% of the price. So, meaning, if we go to production tomorrow, if I want to buy his share, I have to buy 80% of the application I built entirely. Also he is convinced that by "telling me" what to built he's owning everything. In his words, he dictated me the notes and I'm just playing the violin.

I am having trouble explaining to him that he is getting the application to use and make profit basically for free and cannot and does not own the source code unless he buys it off. We are going in circles, I send him the contract to review, he changes it and returns it back. Also, he removes the parts where it is clearly states what he provided and what was done by me.

So, we kind off agreed on the authorship but in the case we break the contract he wants to be able to use the application for 3 more years.

Was anyone here in a similar situation? How do you handle this kind of situations?