Politico published an extensive article about High Times, a long-established publication covering the marijuana industry, culture, and lifestyle. In the article, it was revealed that a lawsuit has been filed by Merlin Kauffman related to the 420.com domain name. Here’s an excerpt from the article that discussed the lawsuit:
“In January, Puerto Rico resident Merlin Kauffman sued High Times in federal court, alleging he had negotiated the purchase of the internet domain 420.com with Levin over WhatsApp. Kauffman wired the company more than $300,000, but the company has refused to turn over control of the domain, according to the complaint. High Times has denied wrongdoing, alleging that Kauffman wired the money before a final agreement had been reached and that it has offered to refund his payment. The case remains ongoing.”
Lawsuit docket tracking website CourtListener.com has the legal filings related to this case. From what I understand, the lawsuit alleges that entrepreneur and domain investor Merlin Kauffman had a deal to buy 420.com, but the defendant’s response (pdf) alleges “an agreement was never consummated.” According to the lawsuit filing (pdf), “Kauffman wired the agreed amount of $307,500.00 to the account of HIGH TIMES to purchase the disputed domain.” The alleged text conversation discussing the sale of the domain name was filed as Exhibit B (pdf).
Current Whois records show the 420.com domain name is registered to Trans High Corporation.
The ongoing breach of contract lawsuit was filed in the U.S. District Court for the Middle District of Florida. The lawsuit was filed against Trans High Corporation and High Times Holding Corporation.
I wonder who high times bought it from.
Looks like Merlin has a strong case here.
Adam initiated contact with Merlin, and even supplied Bank instructions for the $307.5k.
How can Adam claim there was no agreement?
I don’t see any mention about how much more money Adam was asking for.
Wow. Looks like the seller agreed to the sale and the board probably flipped out and wanted more.
Price was agreed to – wire instructions sent – buyer paid.
Looking at the Whatsapp discussion I’d say HighTimes are screwed. They started talking about getting approval and a contract after a contract was obviously already formed, even the money was already requested and sent.
Probably the only issue is whether the employee had authority. Probably hard to argue that the Chairman wouldn’t have apparent authority to enter into a contract.
HT probably needs to sack the Chairman given the size of that mistake.
Terrible. I hope Merlin gets money for his hassles and legal fees also.
Read the “Amended Answer and Affirmative Defenses” — why wire $307,500.00 directly into the account of a purported “seller” BEFORE having “control” of the domain or “control” via a trusted 3rd party or escrow? Too often that’s just a way to “buy a lawsuit” —
“30. On Saturday, December 28, 2019, Levin informed Kauffman that Levin did not have
the authority to sell the Domain Name, and that as a prerequisite to any sale of the Domain Name, he
would need approval of Trans High and High Times’ board of directors.
31. Levin was never able to obtain the requisite board approval, and therefore, an
agreement was never consummated.
32. Kauffman, despite knowing this, wired purported purchase funds to High Times.”
Adam agreed to the $307.5k amount on Dec 27 and even supplied the Wire Instructions.
The funds were wired on Dec 27 which was before Adam added more conditions on the 28th.
Your chronology is off.
Hey Observer, re: “Your chronology is off” — that’s not my chronology, I was directly quoting (see the quotation marks and paragraph numbers in my comment above) from the Defendants’ own “Amended Answer and Affirmative Defenses” which I referenced. You really ought to try reading all of the pleadings and exhibits before jumping to conclusions and making comments.
Well, it appeared that you were agreeing with the order the events took place.
Merlin doesn’t want his money back…he wants to enforce the sale.
It’s not important that he wired the money first.
Sounds like probably:
1. The legal elements of a contract fulfilled.
2. Merlin should win.
It seems very clear that Merlin should win this one fair and square. Deal was made, Merlin paid, the domain is his.
I respectfully disagree with all of you. There WOULD have been a deal had Merlin not followed up and agreed to the board approval. His subsequent agreement/acceptance of that condition will impose an amendment to the understanding.
Had he not agreed to submit to the board approval this deal would have been a binding contract, but it is my belief Merlin had a problem here.
The price $307.5k price component was already binding with Adam, but the board is wanting more after the fact.
The board definitely cannot use price as a reason to renege on the agreement.
Read my other comments
The “dec 27 agreement” was amended by mutual acceptance of other conditions.
Believe me I would like Merlin to win, but in my experience he made a mistake in agreeing to the subsequent terms / requirements
Just my opinion and I have dealt with these matters many a time
But the board was wanting more money after the $307.5k was already agreed to.
They cannot renege on that basis.
It will be interesting to know how much more they were wanting which doesn’t seem montioned anywhere.
Your argument (price) is not what the core of the disagreement Is about and this shows me you don’t understand the law of contract interpretation
The lawsuit will solely be about whether the Dec 27 WhatsApp agreement is binding it was replaced by an additional agreement (new terms and conditions) which became the subsequent agreement
By merlins language in the whatsapp messages you will see he agreed expressly and implicitly that he accepts that a) the board needs to approve it before consummation and b) that written documents need to be executed.
Just to be clear, my position is that had he not agreed to the follow up language and subsequent conversation he would have had a binding agreement. he would have needed to simply take the position that they had already reached a binding agreement and refuted board approval and documents were required. He did not and the agreement was thus amended by a further agreement.
*has a problem here
He submitted to board approval and also kept changing the acquiring party name, and also agreed to execute documents
In other words…whatever deal that existed on Dec 27th was then amended by mutual agreement. The conditions of the new agreement replaced the old agreement from Dec 27, and those conditions precedent were not met (board approval, documents, Resolve of acquiring party, etc…)
He should have taken the position a deal was already consummated and that any subsequent board approval and documents were ministerial or inconsequential to the core agreement from Dec 27.
I would bet he loses the case.
This is why I included the world “probably” above. I did not bother to read all the material (sorry). However, I had courses in commercial and contract law myself many moons ago, and based on what Jonathan is saying and what I learned myself it sounds like Jonathan may be the one who is right after all. Talk about one that got away if that turns out to be so.
The long and short of this case, from my POV, is that he DID have a binding agreement on Dec 27th. He should have stuck to his guns and sent the money without further discussion. The subsequent discussions indicated that Merlin accepted and agreed that docs needed to be signed as well as board approval. He likely did this hoping it would not be an issue (and so as to have an easy transfer of the domain), but as it turns out, it was an issue and the deal didn’t close but he had already accepted the new terms by his language.
While it’s not an open and shut case, and merlin does have an argument, I believe my assessment to be the likely outcome.
The plot thickens:
Apparently Merlin did send the money on Dec. 27.
“The subsequent discussions indicated that Merlin accepted and agreed that docs needed to be signed as well as board approval.”
Or, it was represented to Merlin and Merlin reasonably understood that mere formalities needed to be completed and would be completed at their end before transferring the bought and paid for domain, but that the contract itself was complete and the domain was bought and paid for?
That’s exactly what he should argue….however….the language that I am seeing in the whatsapp messages after Dec 27 does not support that position…..
1) Dec 29 he says “any way we can make the purchase date 1/1/20 as long as the wire hits monday ? (meaning they hadn’t established the contract date nor the actual buying party).
2) merlin then says use “trellian” after saying the buyer is “merlin kauffman” (showcases that the buying party has not been substantiated).
3) Dec 30 “one other minor detail to buzz about board vote”
4) Friday “is this a lawyer doesnt have time issue, or a board approval issue?”
5) “any need for redline in agreement”
6) “can we get this fully executed and domain transferred today?”
Anyway – Merlin has an argument, but his argument would be WAY STRONGER had he just left the deal “as is” on Dec 27th, wired the money, and not entertained the further discussions that followed. The further discussion color in that he understood or acquiesced that board approval was a necessary component to the deal, as well as signed docs and further clarity on the party’s to the deal and actual date of the deal being consummated.
I would argue exactly what you said above, but as I said, the further discussions expressly and implicitly support a finding that other pre-conditions and clarifications were required as a condition to final transfer/consummation.
As they say though….anything can happen in litigation !
I would bet my money on HighTimes though.
Ah, you went there. I’ll have a reply later this evening perhaps, but too pressed for time right now.