This is a scheme used by a lot of large scale breeders. They get the advantage of having access to a breedable bitch without the day to day cost of money and time taking care of her. Some of them (like Kimertal) breed hundreds of puppies a year this way.
That's EXACTLY who came to mind for me as well!
I wouldn't be ok with this situation for many reasons:
1. I assume you wouldn't do any health testing, nor would they yet they ALREADY know they want to breed her?
2. I assume you have no plans to show or compete with the puppy yet they ALREADY know they want to breed her?
3. Breeding takes a lot out of bitch (she could die), so you're going to pay for her, raise her, love her and then they are going to take her from you to be bred and have puppies??? And then sign her over? What if they change their mind and they don't hand her back over or sign her over? Do you have the money to get a lawyer? Even if you win in court YOU still have to PAY the lawyer ahead of time and then WAIT to see if they EVER pay you.
I have heard of breeders requiring a puppy or two back from a show bitch and in that instance they will whelp the litter for the bitch's owner. But the bitch is in both of their names and it boils down to if the bitch is a champion and if all of her health testing comes back ok.
The situation sounds like something I would personally walk away from (or run rather). You can find good breeders on www.dpca.org
under the breeder referral section.