[centdev]

As a subcontractor / freelancer (and I'm not a lawyer), you owe them the code they have actually paid for based on the time you've worked. While it may be illegal to withhold all of the source code, it is not if you retain the code that hasn't been paid for. Also, your contract with them should stipulate the terms.

[segmondy]

I don't agree with this. Take your car to a mechanic, tell them to change your engine and transmission. Pay them for only the engine change after they have changed both. You will not get your par or part of your car. They will obtain a mechanic lein on your car and sell it. If anything is left, after covering their cost, you get that. I don't think he should give them any of the source code, not a line. The company is clearly trying to bully him.