Core Assertion: The company owns the code, not the contractor.
If you're a contractor, why wouldn't you want to keep the actual source to yourself? You lock the company your contacting for into using your services in perpetuity. Good for the contractor; very bad for the company. My guess is that less-than-compentant and more "old school" contractors who aren't able to keep up with technology's pace will push this tactic for their own job security. But the contractor lock-in prevents the company from moving forward with their product using another contractor if the relationship sours with the current contractor. It also prevents the company from transitioning away from contract work to an in-house development team.
The rest of this document contains steps necessary to have the best chance for getting quality code from a contractor. I would consider each item mandatory. There are also plenty of "nice to haves," but I want to keep th