snubbr.com

GoDaddy user reviews : Should I order GoDaddy?? legal, ethical or business as usual?

Get GoDaddy web hosting for just $1.99. Click here to use coupon...

Special $7.49 .COM sales. Click here for this special deal...
I placed this scenario here because of possible implied contractual ramifications beyond what actions may be considered ethical or not.

For purposes of this scenario, assume there is no scamming and such.

A person (seller) gets an unsolicited offer to buy a domain for $300 via e-mail. (This is not through a parking service...just an e-mail from a person to the e-mail address on the seller's whois admin info for the domain.).

The seller replies to the potential buyer by e-mail and says, "The offer sounds good to me. Will contact you in the morning to discuss the details of payment and transfer.".

In the morning, the seller finds an e-mail from an agent/escrow company (acting for the buyer) that says the buyer has made an offer of $300 for the seller's domain...and to click the link to accept the offer and proceed with the transaction.

In the same group of e-mail that arrived that morning, there is another legit offer for the same domain. The new offer is for $1500.

What does the seller do?.

A. Is there a legal contract in place, implied or otherwise, that must be fulfilled?.

B. If there were no legal obligation, is it a matter of ethics that the seller should turn down the better offer and accept the lower one? Would it still be this choice if the new offer was $30K or $300K?.

C. Or does the seller accept the higher offer with no qualms? Is this fair? Or is this a situation in which there is no fair or unfair...it's just business?..

Comments (38)

Generally speaking, until both parties have officially agreed on the sale, neither party has a legal or ethical obligation (in my opinion). For this reason, I never agree ahead of time to sell at a given price. I'll set up an escrow, and when the client officially accepts the escrow transaction, it's a done deal. But if another party comes in with a higher offer before both parties have agreed, it's open game. By the same reasoning, if both parties HAVE agreed to the escrow transaction, it would be unethical to cancel this transaction based on a better offer. If that second offer is substantially higher, yes it hurts! But everyone has their own 'ethics line' of where a contract may be broken...

Comment #1

Legally and morally A.

Many people do C becuase they have no ethics.

As far as A is concerned, the buyer would need to go to court to enforce the contract. There was an offer, concideration and acceptance on teh part of both parties, thus a legal contract...

Comment #2

I would argue that there was no contract because there was no meeting of the minds. The seller's initial reply statement uses language to suggest that it is nothing more than an invitation to continue negotiating over the remaining time constraints, method of payment and transfer, and fees, which are material parts of any domain purchase and sale agreement. Furthermore, the buyer's agent's email is an admission that the buyer understood this, and is now making an offer with all the material terms defined. The seller did not accept the offer so the seller is free to sell to someone else. Assuming that there are no past domain transactions between the buyer and seller, I don't see any ethical issues that should stop the seller from selling to the second buyer...

Comment #3

"unsolicited offer to buy a domain for $300 via e-mail.".

Offer and consideration... the domain for $300.00.

"The offer sounds good to me. Will contact you in the morning to discuss the details of payment and transfer.".

Acceptance.

This is called a contract. All 3 parts are covered...

Comment #4

Based on this statement, ""The offer sounds good to me. Will contact you in the morning to discuss the details of payment and transfer." I would say you have a verbal contract. A contract is an offer and an acceptance. Details and payment are only conclusions to that contract. I think there is a legal obligation, but verbal contracts are hard to enforce. However, if written in email, it could be construed as a written contract.

The least you could do is explain the situation and see what they say. If they insist you accepted their offer, the ethical thing would be to disregard the second offer. If they believe your story and don't think themselves you are bound, they may voluntarily up the offer.

The dollar amount has nothing to do with legality or ethics.

It could also be an offer from a rival or disgruntled employee just trying to hijack the purchase, and the whole thing could blow up into a mess. I have been in a similar situation. I agreed to a price and got a higher offer the next day. I told the second offeror I committed to the first offer, but if it fell through I would give them first rights after that. I don't regret the decision and stand behind the ethics.

Say you win an ebay bid in the last second, the buyer gets a higher offer 1 minute later after the auction close. Should ebay or the seller be able to take that offer instead of yours? not much different really. Look at it from the buyers perspective...

Comment #5

Phil beat me to it. He posted my exact response except I am cooler than him...

Comment #6

"Sounds good to me" is not realy stating an agreement in my opinion.....even about an email the next morning like"i got another, better offer" are you willing to negotiate is not flying.....

I am coming up with this because I got a couple of so called agreements over the phone, basically they agreed to my terms(they wanted to have websites, services from me)....and then they backed out....so in my opinion it means nothing, of course I could have gone after them.....but why bother......

Anyway....as long you dont have a contract underwritten by the 3rd party.....go ahead and sell it to someone else........ that is just the sad part of the internet business......

Cheers.

Frank..

Comment #7

In the scenerio you described, clearly option "C" ...

The "escrow" company acknowledges no agreement exists yet unless the seller clicked their link to agree to offer* and start the escrow process...

* It's important to note, as described in your scenerio, the "escrow" company is also acting as the buyer's agent.

If they were strictly acting as an escrow agent and nothing more, then the answer might be A or B, but in this instance it's clear they are seeking the sellers confirmation of agreeing to the offer ... as long as the seller doesn't do so, there's no obligation legally nor ethically for the seller to sell at that price or any price for that matter.

Ron..

Comment #8

This just means I have a less of a real life than you Frank, not to pick you you directly... but this is the complete quote... "The offer sounds good to me. Will contact you in the morning to discuss the details of payment and transfer.".

There is no way this is not an acceptance. Escrow is just merely a way to carry out the safe transfer of funds AFTER an agreement has been reached. Sorry, but your explaination does not fly. From what you mention, you had a contract, jsut because the other party backed out does not mean they were legally allowed to, it was your job to enforce the contract, you decided not to. This does come down to ethics. REad what I said to Frank, Escrow is merely a safe way to transfer of funds AFTER an agreement has been reached.

Too many people do not know exactly what a contract is. In this senario, there is no doubt there is a contract here. The seller can break it, then it would be up to the buyer to enforce it by taking him to court. And then the buyer will sound like you saying how deals are broken all the time. The reason deals are broken all the time is because they are a lot of people with no ethics...

Comment #9

Presumably the buyer, in the hypethical scenerio, is NOT dealing strictly with an escrow company, but rather probably something more akin to Sedo or Afternic... that's why the seller is explicitely asked to click a link if they accept the offer.

There is no meeting of the minds, as another poster explained - perhaps an attorney experienced in business law will be kind enough to chime in to explain that concept further...

Ron..

Comment #10

Some hypothetical clarity:.

The following morning, the e-mail was from Network Solution's "Certified Offer Solutions." The link takes the seller to a page where he must accept to abide by NetSol's conditions before the transaction can continue...

Comment #11

Are we confusing using escrow to give an unsolicited offer and using escrow for the safe transfer of funds of a previously agreed contract? I bet we are.... (and there are different laws covering each).

I guess my 20 years of writing contracts, RFOs, 8 years of being incorporated, and business classes means absolutely nothing... sigh..

Comment #12

I've written an RFP or two, but an RFO must be something special......

Comment #13

Morally, I would consider my statement "sounds good to me" to be acceptance. I am so used to poor timing that I would have a good laugh and even tell the person I sold the domain to of the new offer.

I am a huge believer in Karma and this is one of those situations that would require great character. You all know that most verbal contacts can not be enforced so the legal issue is pretty moot. At this point it is your word at stake here.

I can look myself in the eyes knowing I always take the high road...

Comment #14

Here's a cite used by law students that might help you in your analysis:.

THE RESTATEMENT OF CONTRACTS.

32. REQUIREMENT OF CERTAINTY IN THE TERMS OF AN OFFER.

1. An offer must be so definite in it's terms, or require such definite terms in the acceptance, that the promises and performances to be rendered by each party are reasonably certain.

207. SUFFICIENCY OF A MEMORANDUM.

1. A memorandum, in order to make enforceable a contract within the Statute, may be any document or writing, formal or informal, signed by the party to be charged or by his agent actually or apparently authorized thereunto, which states with reasonable certainty,.

(a) each party to the contract....

(b) the land...or other subject matter to which the contract relates, and.

(c) the terms and conditions of all the promises constituting the contract and by whom and to whom the promises are made.

*You can read about Restatements here: http://www.law.harvard.edu/library/s...statements.php.

CAVEAT: I believe the correct Section is 33, and not Section 32. The above might be the law students summary of Restatement (Second) of Contracts, Section 33. Certainty.

A credible link to selections from the Restatement (Second) of Contract can be found here: http://www.okcu.edu/law/academics/pd...cerpts-R2d.pdf..

Comment #15

Especially when it comes to buying and selling domains, the method of payment/transfer can be a determining factor. For instance, what if you reach an agreement as far as price goes, but than the parties can not agree on a method of payment? If I agree to sell a domain for $5,000, am I legally or ethically obligated to sell the domain if the buyer insists on using Paypal?.

I'm not sure any of us would feel ethically obligated to conduct a $5,000 sale via Paypal.

I think the method of payment should be an element that must be agreed upon before "acceptance" is established, because it quite often is a condition of the sale...

Comment #16

Hey, I can say, "Your sister looks good to me." That doesn't mean I'm marrying her.

"The offer sounds good to me." You know, $500 sounds like a good offer for the Brooklyn Bridge, but you don't see me reaching for my checkbook either. Plenty of offers can "sound good".

It's a good idea not to make "acceptance-like noises" when negotiating, but there is some ambiguity here. This could have been an "I'll sleep on it", and not a "sold!" Hey, I'm selling a ten million dollar house for one million dollars. Sound good to you? Good point. I get probably two or three calls a week these days from folks seeking to "enforce" escrow.com's agreement, when the evidence of an underlying contract to sell the domain name ranges from non-existent to ambiguous.

Compared to the folks who are trying to weasel out of a sale due to a higher offer, it's running about 50/50 these days...

Comment #17

John, with this scenario, I have to disagree. Though I could see the ambiguity argument you are trying to make, he then goes on to say "Will contact you in the morning to discuss the details of payment and transfer.". That only reinforces that he is acceptiong the 300 offer and went as far as discussing transfer...

Comment #18

Not quite. The statement "Will contact you in the morning to discuss the details of payment and transfer." is evidence that the seller is saying that both parties still need to have a meeting of the minds over the other material parts of the contract, i.e., time and method of transfer, escrow fee splitting, and, if paypal is used, who pays their fees, which could be quite substantial in a high priced domain sale. See: Section 207(1)(c) below.

Now don't forget the rest of the Restatement:.

207. SUFFICIENCY OF A MEMORANDUM.

1. A memorandum, in order to make enforceable a contract within the Statute, may be any document or writing, formal or informal, signed by the party to be charged or by his agent actually or apparently authorized thereunto, which states with reasonable certainty,.

(a) each party to the contract....

(b) the land...or other subject matter to which the contract relates, and.

(c) the terms and conditions of all the promises constituting the contract and by whom and to whom the promises are made.

There is no evidence in the fact pattern that the seller has been identified with reasonable certainty.

1) The buyer could be under 18. I would never sell a valuable domain to a minor, who would then be in a position to "undo the deal" anytime he wanted to until he reaches the age of consent.

2) Identifiying the buyer in a domain sale is a must because of jurisdictional issues..

- Where do you sue for breach? A domain sale to the person in your town is easier to enforce than one on in China..

- Which state's laws do you want to apply in case of a breach? Some jurisdictions have found a domain to be property, while others say it is not a thing.

3) The buyer could be suspect. I research the identity of my buyers all the time to determine if they are likely to reverse charges after the the domain is transferred to them. Furthermore, the buyer could be a scammer using a stolen credit card.

A credible buyer, like a law firm, gets the following instructions from me:.

You may access the godaddy acount to verfiy that xxxx.com domain is in it and in your name. By accessing the account, you agree not to make any changes whatsoever until after I have recieved proper payment. No lawyer is going to risk being disbarred over a felony conviction for a computer crime. This access agreement really makes for a smooth transaction with lawyers.

On the other hand, my suspect buyers go through the most thorough of escrow.com procedures to ensure that the buyers don't weasel out of the deal should they have buyer's remorse or decide to cheat me.

I would suspect that these are the some of the same reasons that Network Solutions requires that the seller click that agreement email for the transaction to continue.

Lastly, what about the "signed by the party..." element? Some jurisdictions might deem an email to be a signature while others do not. Also, some jurisdictions have more domainer-friendly judges.

You see, price is not the only issue, except that failure to consider the other issues as well may cost you in more ways than one.

Let's agree on one thing, any domainer worth his salt knows that the price is not the only material issue in a domain purchase and sale agreement...

Comment #19

That is great. The law is there to back you up if you choose to go for the higher offer..

I was talking in terms of what actually transpired.

If someone contacted me and offered to purchase my website, I am certain that I would know what the intent of the phrase "sounds good to me" was. If I agree to something, regardless of the ability of the other party to interpret what I said, I move forward with it. Certainly, before I returned the correspondence from the second offer, I would contact the first person and make sure everything was still on.

And yes, if you have legitimately have a 10M house that you will take the first M for, I am accepting the offer pending inspection. I can have the money by Wednesday...

Comment #20

"The offer sounds good to me. Will contact you in the morning to discuss the details of payment and transfer.".

Agreement in principle.

Now let me ask this, this deals goes through with no problem if there was no second offer? The original question is about ethical or not. This deals goes through with no second offer. There is an agreement in principle. The OP is looking for someone to say, yeah, it's ok to break the first deal and go the second deal...

Comment #21

Okay, lets go beyond legality and assume there's an agreement "in principal", but not legal. I think the right thing to do is tell the first person that coincidentally, another higher offer came before we commenced the transaction. I think you still have a couple choices ethically, to feel good about yourself, and so that others think they've been treated fairly.

Say you've thought about it and you have another higher offer you'd like to consider, but want to give them first opportunity to match it. See what their response is at that point. They may make a higher offer themselves. They may think it's not true and just a negotiation tactic and voluntarily back out, or they may insist you made an agreement. You can then judge based on now they reaction based on whether they think you had an agreement. If they don't seem to think so, you are free to negotiate or accept the second offer and you don't have to think you've done something underhanded.

That may be making the original deal, negotiating some compromise, or asking for a cut of their sale of you bring them a buyer within so many days if they are a reseller.

Accepting the second offer without allowing the first to compete I think would be wrong. They should have the chance to meet the offer or bid, or at least respond to the situation. People rarely sue for breach of a domain sale agreement or contract, or maybe there wouldn't be so many of them on sedo, afternic and other places. Even so, it can give you a bad reputation...

Comment #22

You are missing the point. Price is not the only issue. Furthermore, the meeting of the minds requirement is not one-sided. Its purpose is to allow both parties to have the same understanding about all material terms before being bound by the terms of the agreement.

Let's say you were that seller, and you agreed to the buyer's price. The next email you get from the buyer is this:.

Please transfer the domain to my Caymen's Island account with registrar XXXXX located in China. I will pay you over five years. The first check is in the mail. This may be the general business practice in some jurisdictions, but remember, domaining is a global business, so what might be reasonable to you, might be unreasonable to the other party.

One more thing. Domain sales can involve parties in jurisdictions that have remarkably different laws of contracts. The buyer's jurisdiction could require an inspection period, or provide for damages that you've never heard of before, among other things.

Contract law is there to protect both parties, and not just the one wishing for a desired procedure or outcome. My advice to anyone involved in domaining is to make sure both buyer and seller agree on all material parts of the contract before saying "I accept your offer.".

Just so you know, there is nothing in the law that would prevent the seller from selling to the buyer in the original fact pattern. The law of contracts, however, says that you don't have to, and for good reason...

Comment #23

DNQuest, I wish you would step back a moment and read the comments the others have said.

"Sounds good to me" is NOT acceptance.

Supposed he said "seems good to me"? Did he "accept"?.

Any number of things could have come up until an Agreement is actually.

Signed that could make it "NOT sound good".

By email a company offered to buy one of my domains for $1,000 as they wanted to get a better Company name.

I agreed.

Then they decided to go in a different direction with their Name choice.

You hear all the time how companies have an "Agreement In Principle"..

It doesn't mean the deal will definitely go forward.

Forget domains.

You offer to buy my home for $125,000.

I want to move so I say ""The offer sounds good to me. Will contact you in the morning to discuss the details of down payment and escrow.".

Overnight my home burns down because of an electrical fire.

By your reasoning we have a "contract" for you to buy my home.

Will you?.

Patrick.

P.S. The original scenario happened to me. I received an offer thru Afternic.

To sell one of my domains. I agreed. Then another party contacted me directly with an offer twice as much. And I would not have to pay any commission or escrow fee as the Buyer said he would pay that.

I was so tempted to back out of the Afternic sale since the Buyer had not yet made payment.

But I did not.

The second buyer increased his offer. That hurt!.

When 6 days went by and the Afternic Buyer still had not paid, I notified both Afternic and the Buyer thru their system that if payment was not.

Made within 24 hours I was canceling the sale.

Payment was made that day. but it hurt...

Comment #24

No, I'm not...but thanks for your opinion of my character...

Comment #25

It might be. It might not be. That was my only point. Based on what is posted, one can argue it either way. There's not enough to go on there...

Comment #26

Quote:.

"Sounds good to me" is NOT acceptance." Well Mr.Berryhill I certainly kowtow to you in legal matters domaining or otherwise. But that's all there is. There was no more.

An offer.

A "sounds good to me " and "We'll discuss details tomorrow".

I'm not really a betting man but my $ is still on 'No Contract'.

Either party could have had a change of heart overnight.

Do you really believe the other party would have a legal leg to stand on?.

Cheers,.

Patrick..

Comment #27

Some of you need to read the Restatement of Contracts for guidance. I'm saying guidance because not all jurisdictions follow it verbatim.

There is a legitimate difference of opinion here about the buyer and seller having a meeting of the minds over the price of the domain, however, an enforceable contract involves more than just agreeing to the price.

My opinion is, based upon the limited fact pattern, that there is no enforceable contract.

I have a scenario for you. The same fact pattern, except that the buyer turns out to be a five-year-old. Do we know from the original fact pattern that he isn't a kid? What should the seller do? Go on the Judge Judy show and sue a five-year-old for breach of contract after he emails you to come to his house to pick up his pennies and nickels from his piggy bank?..

Comment #28

Hey homebuyer, I'm 100% with you!.

Yes. Well ,maybe yes.

Can a 5 year old be listed as the Admin?.

If yes, you have a point.

If no, then...

Verbster said:.

"A person (seller) gets an unsolicited offer to buy a domain for $300 via e-mail...to the e-mail address on the seller's whois admin info for the domain.) The seller replies to the potential buyer by e-mail and says..." A 5 year old cannot own a domain name since he or she cannot legally sign any docs (as I'm sure you know).

But be the Admin???.

Cheers..

Patrick..

Comment #29

It's enough to go to a jury either way.

What this argument amounts to is attempting to resolve a question about whether there was an acceptance in fact. Citing to this or that source of law is not going to answer that question. The way these questions get answered is to put people in a jury box and then they decide. Ummm.... no. Minors can enter into contracts.

I paid a couple of kids to wash my car a few weeks ago. If they wanted to start washing the car and then walk away, they could have done so. I, however, could not have refused to pay them once they washed my car...

Comment #30

Hmmmm, are you guys saying verbster is 5 years old???? (just kidding verbster).

Cheers,.

Frank..

Comment #31

Summarizing: Debatable. Either side could see it differently, and third parties could go either way. If so, probably hard to enforce based on ambiguous wording. Yes, I think it's a matter of ethics regardless of price. I can see changing your mind, but still think you need to handle the first offerer with care and see how they took it.

The second question reminds me of a joke: Man asks neighbor lady if she would have sex with him..

Neighbor lady replies "no way!".

Man asks neighbor lady if she'd have sex with him for a Million Dollars..

Neighbor lady says "Well, yes, I guess for a million dollars I would.".

Man asks lady if she'd have sex with him for $100..

Lady replies "what do you think I am, a hooker?".

Man replies, "Well...I think we've already established that, now we're just haggling over the price.".

The dollar amount shouldn't change the ethics issue, however, it may tempt you throw ethics and a potential customer out the door and live with it. I personally, would at least let the first offerer know of the second offer and give them opportunity to increase their offer or match it. Just accepting the second offer without giving the first a shot is not fair. At least if you are fair with the first offerer and they second falls through, you have a chance to go back. Treat them unfairly and you may not sell at all...

Comment #32

Tricolorro: A 5 year old cannot own a domain name since he or she cannot legally sign any docs (as I'm sure you know jberryhill:Ummm.... no. Minors can enter into contracts. The problem is that the contract is voidable by the minor, but not by you.

I paid a couple of kids to wash my car a few weeks ago. If they wanted to start washing the car and then walk away, they could have done so. I, however, could not have refused to pay them once they washed my car.

As I said , I kowtow to you in legal matters.

The reason I said 5 years old cannot legally sign any docs is from info I had found on: http://www.paralegaladvice.org.za/docs/chap11/02.html.

It states: "The person making the contract must have the legal power to enter into the contract.

Examples of people who don't have legal power to enter into contracts are:.

* children under 7 years.

* people who are mentally insane.

* people who are very drunk or drugged" I did not check any further to see if that is true. I also don't have a clue why 7 years of age is the cut off.

Regarding minors being able to buy domain names:.

I have never seen a Registrar that did not require you to "represent and warrant that You are 18 years of age or older" or "have an agent authorized by law to represent You who is 18 years of age or older who is entering into this Agreement on Your behalf." ...or some such similar wording.

From GoDaddy's Universal Terms of Service for Go Daddy Software and Services.

"10. REPRESENTATIONS AND WARRANTIES..

You, or the individuals who electronically execute this Agreement on behalf of You hereby represent and warrant that they have the right, power, legal capacity and appropriate authority to enter into this Agreement, and that they own and have not transferred to any other person or entity any of the rights, claims or interests that are the subject of this Agreement. You represent and warrant that You are 18 years of age or older, or that You have an agent authorized by law to represent You who is 18 years of age or older who is entering into this Agreement on Your behalf." I know most businesses will not allow a minor to enter into a contract.

Without Parental or Supervisory consent since the contract would not be enforceable by the Company.

I believe all Registrars follow those guidelines.

Patrick..

Comment #33

They don't have to when the other relevant portions of their contract cover.

Those. Who made the contract to begin with anyway?..

Comment #34

This is why it's important to look at the source... This is a website pertaining to laws in Africa...za = Zimbabwe ??.

As for the contracts with Registrars requiring you to represent that you are 18 or over... Minors aren't required by law to adhere to any of the terms, including the one requiring them to be 18+..

Comment #35

Good point. I believe if a minor passes themselves off falsely as an adult, then they cannot get out of a contract as easily as if the seller knew or didn't ask if they were an adult...

Comment #36

I think we have gotten just a little off topic here lol..

Comment #37

Legally: I'm with homebuyer (I think...) that there are still more material issues and it isn't even enough to stretch into the whole realm of "negotiation with good intent" necessary to hammer out the details; it is so "up in the air" as to it's plain reading that I would not view it as a rock solid acceptance, and would be foolish to rely on it as such.

Ethically: Meh. I'm just jaded/cynical enough not to care; might be because I've been trying to sell a used car for so long (With folks backing in and out more often than Ross Perot) or might just be that I've started to view it as "until the deal is done, it isn't.".

-Allan..

Comment #38


This question was taken from a support group/message board and re-posted here so others can learn from it.

 

Categories: Home | Diet & Weight Management | Vitamins & Supplements | Herbs & Cleansing |

Sexual Health | Medifast Support | Nutrisystem Support | Medifast Questions |

Web Hosting | Web Hosts | Website Hosting | Hosting |

Web Hosting | GoDaddy | Digital Cameras | Best WebHosts |

Web Hosting FAQ | Web Hosts FAQ | Hosting FAQ | Hosting Group |

Hosting Questions | Camera Tips | Best Cameras To Buy | Best Cameras This Year |

Camera Q-A | Digital Cameras Q-A | Camera Forum | Nov 2010 - Cameras |

Oct 2010 - Cameras | Oct 2010 - DSLRs | Oct 2010 - Camera Tips | Sep 2010 - Cameras |

Sep 2010 - DSLRS | Sep 2010 - Camera Tips | Aug 2010 - Cameras | Aug 2010 - DSLR Tips |

Aug 2010 - Camera Tips | July 2010 - Cameras | July 2010 - Nikon Cameras | July 2010 - Canon Cameras |

July 2010 - Pentax Cameras | Medifast Recipes | Medifast Recipes Tips | Medifast Recipes Strategies |

Medifast Recipes Experiences | Medifast Recipes Group | Medifast Recipes Forum | Medifast Support Strategies |

Medifast Support Experiences |

 

(C) Copyright 2010 All rights reserved.