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GoDaddy service : Suggest I invest in GoDaddy?? Sedo not honoring offers to buy. Anyone else have this happen?

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I recently found a domain listed on Sedo I wanted to add to my portfolio. It was not listed under their auction category. I was willing to meet the buyer's asking price without further negotiation and offered full price. Within a few hours I received and email from Sedo stating the /img/avatar9.jpg was now switching to an auction format and that my offer met his previously unmentioned reserve. Sedo id domiciled in the US in the State of Massachusetts. Under their user agreement all business in the US is conducted under the laws of the State of Massachusetts.

From CMR 940 3.13 : (2).

(2) Deceptive Pricing. No claim or representation shall be made which represents or implies, in advertising or otherwise, that a product or service may be purchased for a specified price when such is not the case; or that a product or service is being offered for sale at a reduced price when such is not the case; or that such special or reduced price is to be in effect for a limited time only when such is not the case; or otherwise deceives purchasers or prospective purchasers with respect to the price of products or services offered for sale..

After this happened I read the information provided to buyers and the information provided to sellers. Sellers are told they can switch to an auction format after receiving any offer even a full price offer. Buyers are led to believe a full price offer would result in a sale which if I remember business law 101 correctly is the way it is supposed to work. In fact if I recall correctly failing to fulfill a contract it is actionable. A contract is supposed to exist after a buyer responds to an offer with ernest money. Since Sedo had prescreened my ability to buy and had registered my credit card number in thier system that should constitute ernest money.

All honored the agreed upon price when either I paid full price or negotiated for a lower price. Sedo apparently operates under a different ethical and business model.

I will be contacting an attorney in Massachusetts on Monday to explore possible litigation. Has anyone else had this happen? If so a class action might be formed whch would have an excellent chance of getting Sedo's attention since obviously they have no problem with sellers offering a domain for sale and then switching the terms and conditions once a full price offer has been made. In fact Sedo appears to encourage the practice...

Comments (23)

This is one of a number of interesting questions raised about the 'legitimacy' of the present Sedo auctions format.

Please keep us all informed as this matter progresses (as much as may be possible should it go to court).

Good luck with this one...

Comment #1

This is their new 'feature', when you receive an offer for a domain name, you can accept it but also change it into an auction, and when there are no offers, the buyer must still fullfil the offer he made before. A bit strange, but not the first thing on Sedo...

Comment #2

I was unable to purchase the domain at the offered price. That is in fact a loss. That may also be considered a breech of contract since I accepted the apparant offer to sell at the offered price. Had I made an offer below the asking price which is what most would do, I would not have reason to complain. Sedo encouraging by specifically telling the seller he has the right to convert to an auction after receiving a full price offer may also be a tort and subject to punitive damages. I will know more after Monday after I consult an attorney.

The attorney is from California but the application of the Universal Commercial Code should be similar in other states. http://www.sandiegolegal.us/gaston_p..._contract.html..

Comment #3

Prices are only binding in the fixed model, and, in this case, according to Sedo's T&Cs, the buyer has a right to counter, ignore or send an offer to auction. http://www.sedo.com/faq/index.php?ac...asking%20price..

Comment #4

If you had known about Sedo's auction format beforehand, would you still be considering legal action?..

Comment #5

Sedo does not readily make the same information available to buyers. Buyers are not notified that sellers are not bound by any offer they make. Further, buyers are not likely to read the material provided for sellers. Carefully read the information to buyers at the link below. Specifically follow the link in that section that says,.

"Is this an auction? How do I know if I've won?" ( I like the little admission that auctions produce shills) and the link titled, "Are offers binding?" http://www.sedo.com/services/s_buydo...e=us#negotiate..

Comment #6

Hi,.

The likely problem you will have in any litigation is in the wording of the listing.

Seller's price expectation doesn't necessarily mean that the seller is obliged to sell for the price stated. It is merely his or her expectation. There is no buy it now facility.

I agree that this can be potentially misleading for buyers. I have read many threads in the forums about buyers boycotting Sedo because of this. I also see evidence of sellers exploiting this on Sedo by offering valuable domains at supposed low prices in order to generate interest and traffic but with clearly no intention to sell at that price.

There are other similar examples in the industry, an example being GoDaddy's backorder service whereby you get put into an auction if the backorder is successful rather than being awarded the name automatically. The wording implies that you get the name but you must read the fine print.

Matt...

Comment #7

If there had been full disclosure that a seller can switch to an auction format after receiving a full price offer I would not even be here. Sedo makes it appear that an offer to sell at a price is just that. There is no disclaimer or any statement that would normally be viewed by buyers to indicte a full price offer is not enforcable. In fact the term "binding" is used by Sedo and in a manner that would suggest it applies to both buyers and sellers. In fact Sedo tells sellers something entirely different as I have discovered.

Under Massachusetts law, the operative word is implies. The offer doesn't even have to be explicit though I believe an attorney might argue that the language used on the Sedo website is explicit at least when it comes to their claims made to buyers. As it stands, Sedo is now a strictly auction website rather than a mixed website thought they try to make it appear they are both. I will have a better idea of my options after Monday when I contact an attorney.

As to Godaddy, I have used Godaddy's backorder service for years. I haven't made any recent backorders but I have been able to back order names and when they did not sell on Godaddy's auction I was awarded the names once they were to be deleted. I did this are recently as a few months ago. It became more difficult but it was still possible the last time I tried. BTW, I complained about Godaddy's sudden change in terms and conditions when they began the auctions. Guess what? They treated me right and refunded the money I paid to enter the name auction for names I had previously backordered using Investor's Edge.

Parson's is a CPA. In my experience the ethical standards are much higher with CPAs than your average corporate attorney...

Comment #8

Yes, but the word "implies" is so broad that it's precise definition in this case is up for interpretation.

I'm not sure how clear Sedo is about their policies, and I don't really care enough to go find out, but it seems you are overreacting. The fact that you want punitive damages looks like vengeance, which is odd considering you didn't lose anything.

If Sedo is dishonest with their policies then by all means they should be forced to change, but asking for punitive damages seems over the top...

Comment #9

There are two types of wording on Sedo for domains that aren't simply "Make an offer" listings. (Please correct me if I'm wrong on these anyone, but I believe this is the case.).

There's the somewhat misleading, as you've found out, "Seller's price expectation," which is simply a ballpark figure that the seller is trying to get offers at, but that they're not bound to accept. An example of this is the listing of "pcdeals.mobi," just to use one that I find right now on their home page. "Seller's price expectation: 500 $US.".

Then there's the "Selling price," which I believe is the same as a BIN price and is binding for the seller as well as the buyer. An example of this is their listing for "prize.com," again just using one that's on their home page right now. "Selling Price: 165,000 $US.".

I assume you were making an offer on the "price expectation" variety?..

Comment #10

I'm not surprised you are P***** - It does seem very misleading for the buyer - To me it's just like agreeing to sell a domain to someone at your asking price then going off to try and sell it to someone else - Very lame way do do business IMO.

IF it was explained to the buyer upfront then it would'nt be so bad.

(As far as I know it is not.).

I must admit I saw this coming from day one.

...

Comment #11

Debating among ourselves really doesn't count. At the end of the day what matters is what competent legal authorities say and that has yet to be determined. Sedo's practices are misleading and deliberately so. If Sedo wanted to be up front they would explain policies in areas normally viewed by both buyers and sellers. They do not. They tell buyers one thing and sellers another.

Many other states appear to have laws that are much more leinient. In the Southeastern US business can pretty much do as it pleases. The Northeast and California appear to have more stingent rules. Even when disclaimers are added to contracts and aggreements to try and limit actions, courts can and do declare the disclaimers unconsionable particularly where they are designed to limit remedies in an unfair manner. Google "unconsionable contract".

That is why I am contacting legal counsel to determine what my options are. If other have had similar experiences with Sedo I woud like to know as this might also affect my options.

Regarding punitive damages, the point of punitive damages is just that. Their purpose is to punish bad behavior so as to encourage the company and other like it to do as the law requires. Whether this situation rises to the point of recoverable damages remains to be seen but from past experience it is not out of the relm of possibilities. As I have said I will know more after Monday.

Regarding loss, the concept of loss appears to includes future revenue or lost value and does not just cover out of pocket expenses.

Wikipedia has a simplified outline of economic loss from breach of contract. Though obviously written by someone with a British background since the monetary unit is in Pounds Sterling, English common law remains the basis for law in most US states so the principles should be similar. To state I did not suffer a loss is viewing the situation from the narrow point of view that I paid nothing since the deal was not completed (through no fault of my own) therefore I lost nothing. http://en.wikipedia.org/wiki/Damages..

Comment #12

I've seen a LLL.org that was listed for about $90 on SEDO. It had at least 40 offers on it. Bored, I placed an offer the listing stated "Buy for $90" and after I agreed to pay $90 for it, the offer was sent to the seller for acceptance. After a week, I cancelled my offer. I agreed to pay the stated price and SEDO refused to sell the item. Those bastards.

If anything, SEDO will be slapped on the wrist and told "Don't do that again." You will not receive any royalties from it you will simply pay hefty fees for your legal team and SEDO will be forced to alter their wording & notify buyers of the auction thing. Your loss either way damned if you don't, damned if you do...

Comment #13

I, for one, support Diogenes in his quest for accountability. We all talk about how we get screwed over by the big guys, but few of us choose to stand up to them.

It's only when people take a stand against percieved wrongdoings that any true wrongdoings, and their promoters, may be righted...

Comment #14

I stand up for him, truly. But I doubt greatly that anything will come from it other than SEDO rewording a few things on their site. I don't think that's worth all the hassle to anyone...

Comment #15

I would'nt think they are trying to screw anyone over deliberately, probably just an oversight or lack of common sense when building it.

I will never push a domain to auction unless they buyer knows about it. A simple note in the offer section would probably do the trick.

Good luck though.

...

Comment #16

I think buyers should be offered the option to withdraw from the "sale" if "seller" decides to go for auction.

Either that, or the sale agreement should CLEARLY state that the seller has the option to go to auction despite in effect accepting the sales price...

Comment #17

I agree with Randy that I doubt you will receive any compensation, and pursuing this through legal channels could leave you out of pocket. Have you tried writing to Sedo, explaining your position, that you think the wording of their listings implies a direct purchase, which is not actually the case? If you explain to them that you feel you have lost out, they may be able to compensate you with a few free featured listings etc, and may alter their choice of wording for the future. This is the route that is most likely to benefit you IMHO. I wouldn't want to take this one to court myself, although my sympathies are with you- the system is extremely frustrating for buyers. Best of luck...

Comment #18

In common law contracts, there needs to be an offer, acceptance, and consideration. When a seller offers you a product for a price and you accept, a tentative deal is reached. This tentative deal is then consumated once consideration has been paid.

I have never run into this situation with Sedo before, but I believe you may have a valid contract dispute (regardless of what Sedo's TOS say).

In your situation, there was an offer, acceptance, and then a revocation of the offer (which was sending the domain to auction). I'd be interested in hearing what your lawyer tells you. A nice lawyerly letter on firm letterhead to the seller and Sedo may get them to buck...

Comment #19

Fonz,.

The issue that contract issue that MA will turn on, as I'm sure the OP is aware of, is that of "Request for offers" - which is what effectively Sedo has stated they are providing a service to do. In effect, they are advertisements - and whether advertisements act as "offers" depends, in MA, on a 4 part test that would be a toss-up in this one. I don't think his best chance is contract law (And FWIW, punitive damages in contract law? N-o-p-e. Allowed, but very, very rare - usually when there was malicious intent behind the consideration/offer that usually has another basis for the litigation (Tortious interference, etc.))..

His better bet will be Deceptive Trade Practices or other statute, as the common law here seems, as it is intended to be, "looser"..

I've aired my displeasure with Sedo's decision to allow negotiation to a price and EVEN THEN allowing the seller, after the buyer has accepted the seller's counter offer, to send the domain to auction (I haven't had this happen, but I might very well be tempted to back out of a sale at that point... Mind you I don't negotiate on Sedo so it is a moot point, but it's more than enough to get the blood boiling.)..

-Allan..

Comment #20

I just had an offer for a domain on Sedo where the buyer offered me $60. Personally, I was happy to get that as the domain is going to expire in a few months and it was one of my first registered domains and not my greatest I could have sent it to auction, but I gladly accepted their offer. The problem I seem to have with Sedo is that buyers never actually pay for the domains once a price has been agreed upon.

In your situation, sellers are not required to sell, and do not enter into a contract until they accept the offer you send them. Unless there is a buy it now option, which I dont think there is, you can't expect anything until the buyer agrees to your price. I think the way auctions are offered on Sedo are underhanded, because it is really not fair to the buyer. Sellers should either take the offer or counter. It's not fair to make an offer and then find out that it's going to auction and you as a buyer are entering into a binding contract even though you had absolutely no say over the course of events that followed. I could have a $300 budget and make a $300 offer on a domain.

I don't want to be entered into an auction where my $300 and my ability to purchase a domain is tied up for 7 days with no gaurantee of the outcome, if that makes sense.....

Comment #21

I think this post and original point is opening up some eyes, perhaps?.

If the seller is unaware that the buyer can take the domain to auction thanks to the offer being "bait", then that does seem unethical. Unfair?.

Naturally we as sellers want to maximize our investment and opportunity.

But after reading all the complaints (myself included) about all the non paying bidders, do you think that Sedo may be pissing off some buyers with this practice? If there are other bidders running the price up, then that is one thing. But if there are no other bidders and the final bid is the offer made...

Something to consider and ponder. There are "fixed" price sales which essentially is Sedo's from of Buy It Now. Nevertheless, I had the seller change the price after I met his price and was informed the domain was no longer for sale. SedoBay?..

Comment #22

Well the seller needs to accept the offer before they are allowed to sent it to auction. (unless it has been approved by sedo beforehand, ie: without a bid made on it).

Therefore, as a seller - I would think once you send it to auction you have already agreed to sell it at that price unless another person bids.

However if sedo does not hold sellers & buyers accountable to their word then there's not much credit to the whole process, .......basically...its a case of don't count your chickens I guess !.

Weired set up if you ask me.

...

Comment #23


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

 

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