Which Domain Sale Agreement?

We offer three different domain name sale contract templates. One balances the interests of the two parties, whilst the other two favour the interests of one party over another. The differences are most visible in the warranties given by the seller to the buyer. In the pro-seller document, there are few warranties; whereas in the pro-buyer document, there are many.

Do You Need a Domain Sale Agreement?

Not all domain name sales warrant a written domain name sale agreement.

Circumstances where a formal written agreement may be justified include:

• where a domain name has been previously used in the course of a business and the goodwill (unregistered trade mark rights) in the domain name are to be assigned along with the domain;
• if the seller requires warranties from the seller in relation to the domain name, for example a warranty that there are no third party rights affecting the domain name;
• where a transaction is at arms' length or there is a lack of trust between the parties; and
• transfers of valuable domain names.

Key Provisions of Domain Name Sale Contracts

Purchase Price

The domain name sale agreements incorporate three alternative clauses about the payment of the purchase price. The first clause may be used where the buyer must pay the purchase price to the seller by an agreed date. The second clause may be used where the buyer has already paid the purchase price, and the parties wish to formally acknowledge payment. The third clause may be used where the buyer will pay the purchase price to an escrow agent, and the agent will hold the money pending transfer of the domain name.

Assignment

In addition to the transfer of the (contractual) right to use a domain name, you should consider whether you need transfer any goodwill, trade mark rights or rights in passing off associated with the domain name. If the domain name or a very similar domain name has been previously used by or under the authority of the domain name seller, then it may be appropriate to transfer these supplemental rights.

The assignment clause in the domain name sale agreement may cover unregistered trade mark rights and goodwill. Registered trade mark rights should be the subject of a separate trade mark assignment.

Transfer process

Different domain name types and different domain registrars will operate different transfer processes. The transfer process clause in the domain name sale agreements therefore places general obligations on the seller and the buyer to ensure that the process is promptly completed.

Costs and expenses

A number of costs may arise on the transfer of a domain name. The registration authority may levy a charge, the registrars and/or registration agents may levy charges, the bank handling the funds may levy a charge, and the escrow agent will usually charge. This clause specifies where the charges fall.