Transfer Agreement Help

[clemzonguy]

I am trying to buy a website. We agreed on a price on the phone. However the person was trying to get me to lease it from the beginning. I told them it didn't make sense for me to pour time, money and advertising into a site if they could take it away at any point.

So now I got an invoice and it says the following:

If the domain resells from me within 10 yrs they get 50% of that sale.

If business profit revenues exceed 1,000,000 annually they get 3% of Net profits annually.

Has anyone else had experience in this area. I own the .net of the domain and was acquiring the .com as a better business move, however I don't like the idea of signing over my ability to sell the site after full development when I could actually be selling at a loss. It seems the guy kind of tacked these on to slide it through.

If someone can give me some suggestions here that may work so that I don't turn away the buyer but am able to negotiate a better deal on my part I will donate some DNF or something for your time. :-D

 

[GiantDomains]

It's part of negotiating. Tell him no, you want to buy it outright.

 

[clemzonguy]

Maybe I should just counter offer him $1.00. I mean why should I pay him to build a business for him while at the same time he's getting a more than reasonable price for a domain? I guess he just has reservations due to the fact that he has sold other names that have went on to become successful. I mean I am not in the business to make something fail and neither is anyone else.

Probably should have just let the domain expire and bought from Buydomains without a hassle..... :evil:

 

[HOWARD]

A lease can include any provisions upon which the parties agree. He is obviously trying to get the most out of his bargaining position. It's a question of give and take. What if the domain is a toal failure? Is he going to indemnify you for any loss that may be incurred?

You can even make the "rent" reflect the earnings on the web site. No earnings = no rent. The higher the earnings, the more rent is paid.

If you are not a good negotiator, you should retain an attorney or someone who is good in this field.

 

[mole]

Outright, or nothing imho. Sounds like another one of those normal attempt to legally suck the profits of your hard work, assuming you succeed big time. Be prepared to walk away.

 

[Domagon]

...If the domain resells from me within 10 yrs they get 50% of that sale...

Buy the domain and then resell it for like $1 to another entity (create an S corp, etc)...and then remit payment of $0.50 to the seller and then you're done.

In regards to business profits...well, if you do the above, that provision no longer matters...but say for argument sake, the second provision remains in force and you are suddenly doing a million dollars in business *profit* revenue...well, there are ways around paying the seller anything...the seller really doesn't understand business, since it's possible to make a profit and yet never show one.

Ok, seriously, the seller obviously has no clue and thinks that because they've got a buyer, they've hit the lottery...

First off, don't send the buyer any money...they're likely leave you high and dry in a matter of speaking by either just taking your money outright or adding more "surprise" provisions.

Instead, initiate the transaction through Escrow.com (you indicate who the seller is by specifying their name and email address) and use their standard agreement and transfer terms (use at least 7 days for the inspection period to give ample time for transfer).

IF the seller logins to Escrow.com (or similar service) and agrees, then most anything they do beyond that is legally mute, quite really.

Just ignore anything else they send you (don't even acknowledge it) and proceed with the transaction via escrow.com...upon completion, the domain name is yours. Simple as that.

They could try suing you or whatever, but they likely won't get anywhere - and I'd bet they don't have much free money nor extra time anyways to being filing such legal actions; you could even be in a position to counter-sue them if they tried to take back the domain name after selling it to you, assuming you did the transaction through escrow.com or similar as explained above.

If all else fails, *assuming* you are using the .net version for a bona fide business, etc and they aren't using the .com version for anything, then explain that you may be forced to file a UDRP action against them. Note that registration dates don't matter much...so even if your registration was later, you could still possibly prevail in a UDRP.

And keep in mind that a UDRP has no "discovery" provision (at least not the last I checked) so you could really go to town with the filing.

Lastly, depending on the amount of money you're talking about and the importance of the domain to you is to simply offer more...

If for example, you're offering $500...try offering $1000 to buy it outright (be sure to use escrow!!), etc. However, if the amount you're offering is say $5,000 or more (unless the domain is really generic or something), then it may better to hold firm and try one of the above other approaches.

I'm not an attorney - this is not legal advice, but rather reflects my personal opinion - is for informative purposes only.

Ron

 

[clemzonguy]

The name I want is a generic name but pretty specific for the market I am in. Several individuals have derivations of the name already theKEYWORD.com Keyword.us, etc. I was going to let it drop without saying anything about it to the person however someone had the snap and while I could have tried to use pool or other places options are very limited and I am almost positive buydomains would have walked away with it and asked some ungodly amount. So we are agreed upon an amount but he kept wanting to get as much as possible. I made it quite clear I wanted complete ownership without leases or any of that when I hung up the phone. So basically I am not going to fax him any copy of a check now and the deal is pretty much off as far as I am concerned. He can get in touch with me and if he does i'll say those we're not the terms we agreed upon and now I have reason not to trust his motives. I do understand where he's coming from when he says that he doesn't want to sell it then me turn around and sell it for a higher figure. But hey that's the risk he's taking. Plus I will be putting my own sweat equity and money into building it. The name would be nice to have but not under those conditions. The money I am offering would pay for a lot of advertising on the .net name I have and I can buy the hypenated version in the .com for much less because I have already talked to the owner. Escrow.com isn't a bad idea. I really didn't think about that option. Pretty much he was going to accept a personal check to his company (he's in the US thankfully) and he was going to transfer ownership after it cleared the bank.

So the questions remains should I contact him and tell him I am unhappy with the agreement or just ignore him and let him inquire if I received his fax and if everything is in order. Seems to me I'd rather let him feel like he screwed up a sweet deal by being a little greedy. I am sure he's waiting to see what I say about what he slid in there or hoping that I overlooked it entirely.

 

[mole]

Originally posted by clemzonguy
So the questions remains should I contact him and tell him I am unhappy with the agreement or just ignore him and let him inquire if I received his fax and if everything is in order. Seems to me I'd rather let him feel like he screwed up a sweet deal by being a little greedy. I am sure he's waiting to see what I say about what he slid in there or hoping that I overlooked it entirely.

Sometimes a friendly straight talk can do wonders.

 

[Jack Gordon]

Originally posted by DNMole


Sometimes a friendly straight talk can do wonders.

Agreed.

This person is obviously not an experienced or ethical businessperson. I would be completely straight with him. Obviously, you want the domain. Obviously, he wants to sell. You agreed on a price and general terms. He then tried to slip new terms into a contract. This is a situation best handled with a forceful, direct rebuff.

As long as you are already prepared to walk away, you have nothing to lose by telling him that the new terms are a dealbreaker. Frankly, it is not his concern if you are able to resell at a later date for a profit, and he has no right to expect a cut of that.

Good luck. I think you should be able to push him back to the original deal and walk away happy.

 

[hiOsilver]

Clemzonguy,

I like the strategy of opening escrow at escrow.com. This puts a very limited offer, without these additional terms, on the table. He can accept or decline. You have nothing to lose.

If you had offered him $2000, you might initially put in an escrow.com price of $2000 (be sure to put you, the buyer, as the payer of escrow fees). If he rejects the $2000, then wait a week or so. Then submit a new escrow at $2500 (or whatever the max you would be willing to pay to eliminate the additional terms). The seller can accept or reject, but it will have cost you nothing. Chances are, he will accept one of your offers.

With a "written" agreement for the purchase (online will count as written), then any additional terms he asked for in an email, which you never agreed to, will have zero standing.

I once lost an opportunity to buy a house at a great price in large part because I did not put a written offer in front of the seller, my next door neighbor (plus I listened to a stupid realtor friend who told me to offer a few thousand less than the price I knew the seller would accept).

 

[HeavyLifting]

don't agree to any sort of tems like that under any circumstances. the last thing you need is crap like that hanging over your head as you try to build a business.

close the deal with a clean sale, or find another name.