Have an Escrow Backup Plan


We are fortunate because there are a few very good options when it comes to domain name escrow services. Escrow.com and Payonner Escrow are both licensed escrow services that cater to domain investors and others who have domain name transactions.

In the last year or so, I have had several transactions where the counterparty could not use an escrow service for a variety of reasons. On one occasion, I was doing a deal with a financial services institution, and they told me they would be unable to use a third-party company to do escrow. It doesn’t happen often, but domain name investors should have a backup plan to avoid having a deal fall through because of the escrow aspect.

Many attorneys and law firms, even those that do not focus on domain name law, will offer escrow services for domain name deals. In the transaction with the financial institution, we used their outside counsel’s escrow account. It was a bit concerning to use their attorney’s escrow service, but the counterparty to the deal and the law firm were both large enough that I was not concerned about losing out on the funds and/or domain name. In the end, the deal went through without a hitch.

When buying and selling domain names, I prefer to use a third party, licensed escrow service to transact. Not only does this protect my funds and domain name, but it gives the other party additional reassurance. In fact, I think it is pretty silly to not use an escrow service.

Unfortunately, sometimes it is not possible to use an escrow service for any number of reasons. When this happens, domain investors should have a backup plan in place. When I need to use a third party escrow service, I also think it is imperative to have an in-house counsel or outside counsel review the purchase / escrow agreement to ensure my company is adequately protected. This comes at an additional cost, but it is better to be safe than sorry.


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