Domain Transfer Agreement: Everything You Need to Know
A domain transfer agreement is a contract that documents the terms of a transfer of ownership of a domain name from one entity to another.3 min read
2. Basics of a Domain Transfer Agreement
A domain transfer agreement is a written contract that documents and outlines the terms of a transfer of ownership of a domain name from one person, company, or legal entity to another.
Domain Name Assignment
In the past, engaging in the practice of passing out flyers and business cards was the name of the game when it came to promoting your business. Those days are gone, though. These days, much business is conducted online. Having possession of the right domain name has been known to make or break more than one company in today's ever-growing online business market. When considering possible domain names for your own company, you'll want to think of names that are:
- Easy to pronounce
Keep in mind, there's a good chance the domain name you want to use has already been taken. However, just because a domain name is taken doesn't mean it's not still possible for you to obtain it. It may be possible for you to purchase the domain name from its current owner, although it might be somewhat costly if it's a relatively popular name. According to federal law, a domain name is considered to be a piece of personal property. That means it can be bought or sold, just like any other piece of property.
Whether you're the buyer or the seller in a domain name transaction, it's important to make sure you put the exchange in writing using a document commonly known as a Domain Name Assignment. Domain Name Assignments are also sometimes referred to as:
- Domain Name Transfer Agreements
- Domain Name Purchase Agreements
- Domain Name Assignment Agreements
You should use this document if:
- You plan to purchase a domain name from a third party or another company.
- You plan to sell a domain name you currently own.
Basics of a Domain Transfer Agreement
The following elements are involved in forming a contract of any kind:
- The offer
- Acceptance of the offer
- Consideration, either via financial payment or an action being taken
- The explicit intention to create a legal relationship
When somebody wants to dispute the terms of a contract, there is always an opportunity to offer legal arguments based on technicalities. In most cases, however, the fundamentals of contractual relationships will still apply. It can be helpful to have a strong understanding of these contract elements. Doing so will help to prevent unpleasant surprises as you move forward with your transaction to purchase a domain name.
To begin with, it's important to understand what an "offer" is in terms of a contractual transaction. Sellers who post their listings on websites such as Flippa are a great example of an offer. In the case of a Flippa listing, the seller is describing what he or she has for sale, whether it is available at a reserve. Also, they include a price to purchase the item immediately without having to compete with other offers.
As the buyer, it's important for you to have a solid understanding of the listing and ask any questions you may have of the seller before making a bid. In the event that you choose to place a bid or buy the listing at the "buy it now" price, and you haven't done your due diligence in the form of asking questions and researching the listing thoroughly, you have already accepted the seller's offer. This can be dangerous for you if the listing turns out to be something other than you were expecting, and this surprise could have been avoided by reading the listing thoroughly and asking the seller any questions that came to mind before taking any action.
Acceptance, much like the offer, is fairly self-explanatory. In the Flippa scenario, as soon as a bid is placed, the bidder is accepting the seller's offer at the bid price. If you place your bid at the maximum price to avoid being outbid, your acceptance occurs every single time you come out as the highest bidder. When you accept an offer, you're accepting:
- The item or items the seller has described and listed for sale
- Content about which you've inquired
- Additional items the seller has agreed to include
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