OK domainers it time to go back to the basics.
You can only sell a domain once.
If you agree to sell a domain and the buyer pays you, you have a done deal.
You have to transfer the domain or you can be sued.
and Yes e-mail’s count.
It Seems obvious to me but, I realized this was not the case with many domainers, when our good friend George Kirikos alerted me to the story that the first buyer of CamRoulette.com was suing the original seller of the domain and sent me the link to the discussion on the DnForum.com (post is now closed and taken down)
When I read through the post on DnForum, I almost fell off the chair.
This story needs to serve as a wake up call to domainers who don’t seem to know the most basic principals of contract law.
If you agree to sell a domain and the other party accepts you have a contract.
If the other party then pays you they have performed on the contract, done deal.
In the case of CamRoulette.com he is how the original Seller describes the transaction in detail in the forum post:
“””Let me start by stating that I am a 20 years old. I’m self-employed and I am a high school graduate. I have a strong passion for the entire umbrella of internet marketing: be it affiliate marketing, PPC advertising, domaining, etc. I’ve been using the internet to make money since I was about 17 and I’ve always loved it.
Last year on the night of December 12th, I discovered ChatRoulette. Immediately I recognized that this was a pretty unique website and that it could grow. Maybe I’m ignorant, but with the platform of the site (being as it is not adult in nature) and the estimation of the bandwidth bill (wasn’t aware that in Flex, the cam-to-cam bandwidth is passed peer-to-peer), I was not under the impression that it would be worth millions. I could see the Alexa Top 100,000, but today it’s almost within the Top 1,000.
Upon some playing around on ChatRoulette, I decided I had some extra money and I’d like to invest in a site very similar. I thought of some little personal touches that could be added to improve the idea of the site right there on the spot, so I went and reserved my domain name. I ran a WHOIS on the domain name c*mr*ul*tte.com and saw it was unregistered. As the primary function of the website it to cam, and not to chat, I figured this made more sense. I spent less than $10 at Dynadot registering c*mr*ul*tte.com and I was prepared to make my little ChatRoulette clone site.
Months passed and I became increasingly busy. I never got around to developing the website and camroulette.com just sat. Exactly two months after hand registration, I received my first offer. It was $275 if I recall, an offer from a guy in Canada. I hardly considered it, but within the next two days I received another offer. This offer was from who we’ll call Person A. Person A offered me $700 for the domain. At that time, I was confused as to why after two months I was receiving absolutely no offers and then within two days I’ve received two. I figured maybe the domain was posted on a forum or something and a few people got an itchy trigger finger and wanted to gamble on the domain. With that in mind, I told Person A that I’d sell him the domain. I actually went as far as to request the $700 payment via PayPal that night.
When I woke up, things were different. The $700 invoice had been paid. I began looking into Dynadot and I was confused on how to push the domain. I haven’t used Dynadot so much. In the midst of this confusion, I received another offer, from Person B. This offer was for $1200 (I’ve confusingly cited this offer as $1400 on NamePros and a few other places, the offer was $1200). Upon receiving and confirming the offer, I refunded Person A his $700. I told Person A I was a little unsure of things and instructed him not to pay me again unless the domain was first in his account. I then decided and went through the transfer and sold the domain to Person B. He sent me $1200, I sent him camroulette.com. For a day or two, Person A was asking me what was going on. I was extremely busy and didn’t respond to any more emails from Person A.
A month passed and ChatRoulette hit local news stations, CNN, Jon Stewart, everything. Person B resold the domain name for $151,000, to put it in short.
This made me feel completely stupid. I was depressed about the whole situation and still today I question why I made any agreements to sell the domain and actually acted upon them. $151,000 would have done so much for me, but a deal was a deal. I sent him the domain, he sent me the money, and to me that is what signifies a deal and contract. I’ve thought on this enough so I won’t sit on it too much here, but it gets a whole lot worse than this.
On the 13th of this month, I received a letter via FedEx. I am now being sued by Person A for breach of contract in fraud, as I had previously agreed to sell him the domain name. The demand on the lawsuit is $150,300 (the difference between the resale price and the price I agreed to sell it to him for). To make this situation harder on me, I live in Florida. I am being sued in the state of NY, and I would have to appear in NY. I’ve never been on a plane and I don’t even think I can afford the travel and attorney fees. The man suing me is a millionaire. He is a gold medal Olympian and he sells diamonds to celebrities. He has a lawyer who has worked for major registrars and operates under one of the most respected firms in NY.
I am just lost here. I’m 20. I have 4 figures to my name. I’ve spent ~$500 in consultations, one with a local attorney who laughed at me and told me I was “screwed” and would need an NY attorney, and an NY attorney who told me that this guy would eat me alive and my best chance is to plead guilty and file for bankruptcy to save myself the stress of travel. I don’t know what to do here. When I look back on the incident, in principle I feel as if what I did wasn’t very smart. I had no idea I was entering a binding contract by exchanging those emails, it was like a casual sale to me. Obviously I had no idea this would blow to a 6-figure ordeal. I don’t want to sound desperate, but I feel like a minnow who is now being swam around by a shark, a 40-year-old guy with an amazing life and all the money in the world, and now he wants every cent I’ve ever had and wants to put a huge scar on my life over a domain name. In the complaint (which I will attach if requested) he cites me as the owner of www.TheCraigSnyder.com – a publisher and consultant. He is very likely under the impression that I have $150,300 and that I am around his age, as if that matters, but that’s not my situation.
I can’t fly back and forth to NY to defend a case I don’t even have a shot with. I don’t even think I can afford a lawyer to aid me through the process. Emotionally, this has troubled me so much recently and I don’t know what to do at this point. I feel as if all I can do is ignore these court demands coming to my home (I live with my parents) and wait until eventually I’m seen as “guilty.” When the demand of $150,300 comes, I file for bankruptcy and put a huge hole in my financial life.””
So lets recap.
The Seller agrees to sell the domain in writing through a set of e-mails for $700, tells the buyer to paypal the funds which the buyer does and then the Seller decides not to sell to the first guy because he received a higher offer which he accepts from the 2nd guy and then suddenly figures out how to transfer a domain at Dyandot and does so.
If there was any question about the case before, your post on the forum doomed you.
Now I’m not going to get into the issue of damages. This is a little more complex and outside the scope of this article.
Besides the problem is bigger than just this one instance.
Almost more surprising than the Sellers post is some of the responses to the post.
“”I don’t think the guy would have a case honestly. Just because nothing was in writing.”
“email is not binding. personally i’d want to fly to NY just to beat the living shit out the person suing me… bad enough you lost out on a huge sale but now some sorry loser prick is suing you for it? good god. good luck man.”
“”I am not an attorney but if he is going to sue you he needs to prove that he lost money. You refunded him the $700 so he didn’t lose any money. Potential income means jack (anyone can say “well, I could have sold it for $$$”). Emails can also be easily manipulated and I don’t think they’re normally taken in as evidence. I wonder if you win the case if you can sue him back for all your legal fees?”
“”This is a bunch of bullshit. Any lawyer worth their salt will tell you that since you refunded Person A the money with no loss whatsoever”.
Really you believe this?
Ok boys and girls.
First of all in theory you don’t need a written instrument to have a contract.
You can have an oral contract for most assets.
Of course with an oral contract your going to have a hard time proving it unless maybe there were witness who heard it.
Second of all, an e-mail is written instrument.
Yes an e-mail is written. Not hand written (although a hand written piece of paper can serve as a contract as well)
A series of e-mails becomes a string of written documents evidencing the sellers and buyers mind set and certainly can become a contract.
Now if you want to claim that you didn’t send the e-mail, that someone hacked into your account or sent it from an e-mail you didn’t control then that’s a matter for the jury. But if you aren’t claiming that type of defense and admit the email were sent and received then you can have a contract based off of them.
Buyer’s have rights and don’t hate on them for pursing their rights.
For the record the following are not defenses to breach of contract:
I’m only 20 years old.
I don’t know what I’m doing.
I got greedy.
I made a mistake.
I have no money.
Also its probably not the best idea when your involved in litigation to go discuss it or post about it on the net.
He is a final comment from the Seller:
“”I would understand if I listed this domain on Sedo or some other domain marketplace. He sent an email to my personal email address that he snatched up from the WHOIS information. My only intent to sell was after I received an offer; it’s like someone came and knocked on my door offering to buy something, it’s not as if this was put up for auction at a local marketplace””
Funny the Seller mentions this, because this is exactly what happened in another situation involving not 1, but 7 domains which looks like maybe heading to litigation.
In this case the winning bids totaled almost $200K and involved several different buyers.
In that case someone listed domains for auction on Sedo, allowed the auctions to conclude with sales, and after decided it was all a mistake and he is refusing to follow through. (since the seller is not officially in default I’m not going to discuss the exact domains, but will when and if the seller goes into contractual default)
We all hate deadbeat bidders at auction.
There isn’t one domainer who is going to stand up and defend the guy who takes your $500 bid on a domain to $2,500 making you pay $2,600 just to find out he had no intention of paying the $2,500. Nor will you find one domainer who will defend the guy who bids $2,500 wins the auction and then doesn’t pay for the domain.
Domainers have no tolerance for dead beat bidders why do they defend non-performing sellers?