Legal Advice on Defaulting Seller

[Warren]

I purchased a domain on Sedo from a member of this forum. We agreed the price and both parties entered into the usual electronic contract one does when buying/selling a domain on Sedo. I then paid for the domain in full through Sedo. The seller has since then defaulted on our agreement by not responding to Sedo or our numerous attempts to contact him. It also appears that he might have sold the domain to a third party as the Whois info has since changed.

My questions are:

1. This would be a very valuable domain for us, (the agreed sale price, which is still held in escrow by Sedo, was around £1000), and we have already spent considerable amounts of time developing a website around the domain name, creating logos etc. whilst waiting for the paperwork to come through. We would be willing to fight to get our hands on the domain if this is possible, but we have yet to take legal advice. What are your opinions, do we have any chance of getting the domain through legal action if he has indeed already sold it to a third party?

2. Sedo has said that they would suspend the seller's account for defaulting on the deal, but from reading other posts about experiences with Sedo it seems they might just not care... Does anyone think Sedo will take any action against the seller?

3. Is there some sort of warning system here on the forum to let others know of "rouge" sellers/buyers that enter into agreements and then default on them? I don't want to just throw out the name here without knowing what the usual practice is. But I would hate for other members to have to waste the time we have been doing over the last few weeks to developing something they thought that they had bought, only to find that the seller defaults on the deal in the end...

Any advice or thoughts on how to proceed with this would be much appreciated.

 

[GreyWing]

My advice would be that it's a difficult road to down to get hold of a domain after payment, as the seller might just say it wasn't them that agreed the sale. Then you'd have to go down the road of prooving that it was them that owned it, their's to agree a sale and the person who clicked sale was authorised to do so.

Was it a regular memeber on here as I haven't heard of a regular member on here that would do that on purpose.

I'm assuming it wasn't me on the grounds that I never sell anything :-D

But have a word with admin and he might be able to mediate for you.

Or you can always PM if you need any private advice

All the best
GW

 

[Edwin]

For a transaction as small as £1000, it hardly sounds like it would be worth your while engaging a lawyer, as a few hours of their time would cost the same again - and it might take more than a few hours to to battle to a conclusion where you get the name!

Now if it had been a large transaction (e.g. £10,000++) it might be worth getting legal representation because doing so would potentially be a much smaller fraction of the overall costs.

 

[retired_member16]

As stated by OP

"This would be a very valuable domain for us"

 

[Jeewhizz]

Tricky one.

Here's how I see it. By accepting your offer, they've entered into a contract. By you paying, you've 'sealed the deal' as it were. I can't see there being much wiggle room for the seller to say 'it wasn't me' - if it was from their sedo account.

If the domain is as valuable as you say it is, then I would go for it - get your lawyers on the case.

I would also name and shame them here

 

[bb99]

My advice would be that it's a difficult road to down to get hold of a domain after payment, as the seller might just say it wasn't them that agreed the sale. Then you'd have to go down the road of prooving that it was them that owned it, their's to agree a sale and the person who clicked sale was authorised to do so.

If this particular thing happens, you can surely rely on Sedo to help you out. Afterall, they verify ownership of all domains added to their system and they may be making payments to the owner if other names are parked. All of these things will help convince a judge that the owner is the owner. Sedo will probably still want their commission though :mrgreen:.

If the domain's owner is UK based and the Sedo system effectively creates a contract between buyer and seller (which I think it does) then I'd take them to the small claims court to get the contract enforced. You don't need to employ a solicitor but it might be helpful to do so

I assume that the small claims court does this sort of thing, I may be wrong.

As for the domain being sold to a 3rd party in the mean time, I don't know on that one - maybe the small claims court could still rule in your favour on the basis that the seller didn't have good title to the domain when it was transferred to A N Other. I really am guessing on that one though.

 

[GreyWing]

If this particular thing happens, you can surely rely on Sedo to help you out. Afterall, they verify ownership of all domains added to their system and they may be making payments to the owner if other names are parked. All of these things will help convince a judge that the owner is the owner. Sedo will probably still want their commission though :mrgreen:.

I certainly wouldn't say it's impossible, but very very hard even if Sedo offer assistance. The guy could say anything from he left the system logged on and a third party clicked accept either maliciously or by mistake. The password could have been cached in the system.

It just seems highly unlikely that you would be able to convince a court that this had taken place. Sedo wont (shouldn't) be able to release his IP address to you without a court order, this will take time and money. Plus you would have to have something to compare that IP address to, for example the logins on here or his internet hosting company. This is going to be even more expense.

I'd personally let it drop mate and get your money back, name and shame the appropriate person if admin and the mods alllow.

All the best
GW

 

[Alien]

I'd personally let it drop mate and get your money back, name and shame the appropriate person if admin and the mods alllow.

Sorry to hear this and the troubles you've had.

Definitely warn others here of the member in question, if this is permissable?

 

[Warren]

I just wanted to say thanks to everyone for their advice. I am now in the process of taking legal advice with an attempt to try and get justice through the courts or Nominet.

In response to some of the comments.

For a transaction as small as £1000, it hardly sounds like it would be worth your while engaging a lawyer, as a few hours of their time would cost the same again - and it might take more than a few hours to to battle to a conclusion where you get the name!

It's not just the cost of the domain name, (although I had forgotten that the purchase price was actually £1500 and not £1000), but also a fairly large team has been working on developing a website for this domain since the time seller entered into the contract to sell it to me. It is also the fact that I am afraid that I will not be able to find something of equal quality and brandability (is that a proper word? :??? at a similar price, if at all... The lawyer has actually offered me a very fair deal which will limit my legal costs to something manageable, at least at this stage.

As stated by OP

"This would be a very valuable domain for us"

Exactly.

Here's how I see it. By accepting your offer, they've entered into a contract. By you paying, you've 'sealed the deal' as it were. I can't see there being much wiggle room for the seller to say 'it wasn't me' - if it was from their sedo account.

The twist is that the seller has transferred it to a third party, but I agree that there should be very little wiggle room since we both entered into a binding contract before it was transferred to the third party, and since I had also paid for it I am thinking that the sale had already "been concluded" before it was transferred to someone else...but it will be interesting to hear what the lawyer thinks.

If the domain is as valuable as you say it is, then I would go for it - get your lawyers on the case.

Yes, this is what I am now doing and hopefully it will work out.

If this particular thing happens, you can surely rely on Sedo to help you out. Afterall, they verify ownership of all domains added to their system and they may be making payments to the owner if other names are parked. All of these things will help convince a judge that the owner is the owner. Sedo will probably still want their commission though

Well, I am not convinced that they will be of much help, but at least they say that they are suspending the sellers account for defaulting on the contract.

I certainly wouldn't say it's impossible, but very very hard even if Sedo offer assistance. The guy could say anything from he left the system logged on and a third party clicked accept either maliciously or by mistake. The password could have been cached in the system.

This seems pretty far fetched to me. With that argument the court would be saying that pretty much all electronic contracts are worthless. I am pretty sure that Sedo requires you to re-enter your password just before you approve a sale or purchase, so unless someone else knows the seller's password or has hacked his account, (could be checked with the IP from Sedo), I would think this would be a difficult argument to make. The lawyer is looking at my case now so I don’t know if you are right or not, but I hope not!

Definitely warn others here of the member in question, if this is permissable?

I am going to wait with this until I speak to the lawyer, and I also want to make sure that this is ok to do in the forums…anyone know for sure?

I will keep everyone posted on how this progresses once the lawyer has had a chance to look at it properly and given me advice on the best route forward.

Thanks again for your input and advice.

 

[GreyWing]

I certainly wouldn't say it's impossible, but very very hard even if Sedo offer assistance. The guy could say anything from he left the system logged on and a third party clicked accept either maliciously or by mistake. The password could have been cached in the system.

This seems pretty far fetched to me. With that argument the court would be saying that pretty much all electronic contracts are worthless. I am pretty sure that Sedo requires you to re-enter your password just before you approve a sale or purchase, so unless someone else knows the seller's password or has hacked his account, (could be checked with the IP from Sedo), I would think this would be a difficult argument to make. The lawyer is looking at my case now so I don’t know if you are right or not, but I hope not!

Remember it isn't ilegal to give your password to someone and just because you give your password to someone doesn't give them the right or authority to sell your goods. That's all the seller has to say and that's the end of the court case.

Don't get me wrong mate if what you say is true (no reason to doubt it) then I'm on your side. But part of being on your side is not wanting you to waste your money. The chances of this coming out in your favour are very very slim.

Independent advice would be to just let it drop buddy and just nam e and shame, that's if you want to hurt someone's reputation. Are you sure it was a regular memeber on here? It just doesn't sound like something that I have seen before from anyone familiar. Plus most of the regular sellers on here would sell direct and not use sedo.

All the best
GW

 

[Warren]

Remember it isn't ilegal to give your password to someone and just because you give your password to someone doesn't give them the right or authority to sell your goods. That's all the seller has to say and that's the end of the court case.

I appreciate your comments GW, but as I said, I don't think the court will agree with your viewpoint because in reality that would pretty much invalidate any electronic contract if a person could back out on those grounds, and besides I think the court would see straight through it as an attempt to wriggle out of the agreement to sell.

Anyway, the lawyer is working on it and I will be following his advice. If he thinks there is a reasonable chance of recovery through the courts this is the way I will go, and then I will also seek compensation for at least some of the development costs to date. But its all in the lawyers hands now... Judging from some of the cases he has won recently, and add the fact that he is a member here, and I think I am in the best of hands! :-D

 

[WaftyCrank]

I'll be interested to hear (or see if there is an electronic judication) the results of this for reference. I personally don't think you will win this case as there are too many variables. And if the domain is resold prior to the court appearance you would have no recourse with the new owner to obtain the domain from them.

You may get recompense from the previous seller (if you won), however I feel this is a difficult case to win.

Keep us informed though.

 

[scooter]

If the case was one, would the new owner not be forced to hand it back as he is not the true legal owner, as in fact, the original owner had agreed to sell the same name twice?

Double selling?

A bit like buying a car and then having it taken off you as there was outstanding hp on it. In other words, somebody already legally owned it when you purchased it.

:???:

 

[robert911]

Warren

I know how you feel. It happened to me in reverse

I sold a domain last month for USD $20K on Sedo. The buyer then stopped responding to Sedo, and disappeared into thin air. The address given was that of an attorney in New York, who had no knowledge of the transaction apparently

What annoys me is how little or no vetting takes place on large bids by auctioneer

Its high time that for significant bids e.g. over $5K, the action houses demand a 20% deposit from buyers. And become registrant in escrow from seller prior to sale. That stops people playing games, because they either forfeit or have to go thru with it

Robert

 

[rob]

Warren

I know how you feel. It happened to me in reverse

I sold a domain last month for USD $20K on Sedo. The buyer then stopped responding to Sedo, and disappeared into thin air. The address given was that of an attorney in New York, who had no knowledge of the transaction apparently

What annoys me is how little or no vetting takes place on large bids by auctioneer

Its high time that for significant bids e.g. over $5K, the action houses demand a 20% deposit from buyers. And become registrant in escrow from seller prior to sale. That stops people playing games, because they either forfeit or have to go thru with it

Robert

Had similar buying and selling (£15k deal was one) on Sedo. In some cases it seems Sedo is quite happy to have the user in question maintain an account with them.

I am not sure why a straight ban policy is not in place, if not use some of their size to back a name-shame system to help protect domainers worldwide.