Legal News

Domain sale negotiations can be a bit risky. I think two of the biggest potential pitfalls include 1) a prospective buyer using the negotiations in a UDRP or legal proceeding or 2) a buyer failing to follow through with an accepted offer.

I think a creative  way that could reduce the risks is to have the prospective buyer sign an agreement prior to negotiating to buy a domain name. The agreement would list the terms and conditions of making an offer and discussing an acquisition.  When you receive an offer to buy a domain name or an inquiry about a domain name, you can tell the prospective buyer that you require an agreement to be signed prior to negotiating the sale of a domain name.

I would obviously speak with an attorney to have an agreement such as this drafted, and some of the terms I would want to include in the agreement would be the following (along with my rationale):

Let’s say you just closed a mega-deal. You’re pretty amped because the right buyer came with the right offer, and you closed a fantastic deal on a domain name. You may or may not have signed a non-disclosure agreement covering the negotiation and purchase price, but the company that bought it announces that it acquired the domain name from a cybersquatter. Not cool.

I’ve seen quite a few news reports, first person acquisition stories, and other types of articles that discuss how a company acquired a particular domain name. While most presumably won’t  divulge confidential information, the  company principals  might not be prevented from writing about the seller. Perhaps they were nice when negotiating for the sake of closing a deal, but behind closed doors, they are upset they had to pay a “cybersquatter” or someone who was “domain hoarding.” Whatever the case may be, you should protect yourself.

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