I was looking back at the events of this week concerning the ad.com disputes, I realized that I had never read the “bidders contract” that I have signed many times at TRAFFIC and DomainFest shows, with Moniker.com

I know your thinking “how could Mike, being an attorney, never read the contract?

Well if you have ever been to a TRAFFIC or DomainFest show, you would see that most bidder sign up and get their paddles right before the auction.

Typically, there is a lunch before the auction, then everyone heads over to the table outside the auction room to sign up and get a paddle.

When you “signup” for a paddle your actually signing a contract with Moniker.com.

However like most of you I just signed whatever they shoved in front of me as quickly as possible, grabbed my paddle and headed into the auction room to grab a seat.

Did I have a chance to sit at the table and read the contract?

Sure.

Could I have asked for a copy of the contract the day before and read through it before signing it.

Absolutely.

But I never did, and I venture to guess, that 99% of you guys have never read the contract either.

So again in light of this weeks events, and with another TRAFFIC show upon us in 2 months, I thought it would be a good idea to read the contract we all sign to get a bidders paddle and see what it says.

First for the disclaimer:

The following is my own personal opinion and should not be relied on by anyone as legal advice. Anyone bidding in the auction should seek out their own attorney to have this contract (and any other auction houses contract) reviewed to get competent legal advice.  The discussion contained here is meant to be a general discussion about the Moniker’s bidders contract and not about any particular case or domain.

I feel so much better already.

Now as I read the contract, its seems pretty strong to me.

Remember this contract is between the bidder and Moniker.com.

It outlines your rights and responsibilities and Moniker.com rights and responsibility.

(After you win a domain auction, there is a second contract that is signed between the buyer, the seller and Moniker.com.  We are not looking at that one right now.)

Now back to the bidders contract.

IMHO, The contract does quite clearly state that if you are the high bidder, on a domain, your a liable to moniker for their commission (15%) of the high bid/selling price, plus you are liable for all of Moniker.com’s costs and expenses, including their reasonable legal fees.

Moreover by signing the bidders contract, you are subjecting yourself to jurisdiction of, and the case will be held in Los Angeles, California.

That means you will have to hire a lawyer who is licensed to practice in that jurisdiction and for any court matters that require your presence, you will have to come to in LA.

IMHO I think the only possible defense to this contract could be if you could show that Moniker had actualy notice of a problem with the domain, prior to the auction, and didn’t disclose it.

So if for example Moniker received notice from a third party, claiming rights in a domain prior to the auction, and did not disclosed the problem or claim, prior to the auction, you might have a defense to the claim for commission.

Assuming Moniker.com had no direct knowledge, of any problem or claim,  then between you, as the bidder and Moniker.com as the auction house, your stuck for the commission.

Here is the contract for your and your attorney’s review:

“”””This agreement (“Agreement”) outlines the terms by which a Buyer may participate in any live auction event or portion thereof (“Auction”) of domain names conducted by Moniker. By signing this Agreement, Buyer expressly acknowledges that they have read, understood and accept the terms in this Agreement.

2. Term:
This Agreement commences upon Buyer’s express acceptance of the Agreement. The Agreement terminates at the end of the Auction, or when Moniker has delivered all domains purchased by Buyer at Auction to Buyer, whichever comes later.

3. Payments:
A domain name purchased by Buyer during the Auction must be paid for in full within [ ] business days of the close of the Auction. Payment must be remitted via wire transfer, cashier’s check, or personal check. If payment is performed via personal check Moniker may delay delivery of the purchased domain name until the check clears. Moniker reserves the right to accept payment in any form other than those listed at Moniker’s sole discretion.

4. Confidentiality:
Moniker will not share any personally identifying information we gather about Buyer unless we are legally compelled to do so. Moniker reserves the right to share Buyer’s bid alias and bids during the auction, and following the auction may disclose the domain names sold and their final auction prices.

5. Moniker Responsibilities:

Moniker will:

a. Auction domain names and award them to the highest qualified bidder at the close of bidding. A qualified bidder is one who in Moniker’s sole discretion is determined to have the ability to fully comply with this Agreement.

b. If Buyer is the highest qualified bidder for a certain domain name (the “Name”), work with Buyer to facilitate Buyer’s payment to Moniker for the Name.

c. If the Name is registered at a registrar controlled by Moniker, Moniker will provide Buyer with all reasonable assistance to manage the Name.

d. Upon receipt of payment (and the clearing of funds, if applicable), Moniker will promptly deliver the Name to Buyer.

e. Proactively and aggressively work to prevent and/or contain any fraudulent activity related to the Auction.

6. Buyer Responsibilities:

Buyer hereby:

a. Affirms that they understand and agree that any bid entered in the Auction is a binding agreement to purchase the domain name bid upon at the price bid, and that Buyer agrees to be bound by his bid.

b. Agrees that upon winning a Name, Buyer will promptly, within seven business days, pay Moniker the full purchase price in a manner prescribed by Moniker.

c. Affirms that at the time of placing the bid Buyer has sufficient resources available so that should Buyer’s bid be accepted the transaction can be completed.

d. If acting as an agent, Buyer represents that it has the authority to bind Buyer’s principal to all terms contained in this Agreement and that a breach of this Agreement by Buyer’s principal will be considered a breach by Buyer.

7. Warranties; Disclaimer of Warranties:

a. Moniker warrants with respect to itself only that:

i. It has the legal power and authority to enter into this Agreement;

ii. It will perform its obligations under this Agreement in a timely manner, in good faith and with all due skill and care;

iii. Its performance under this Agreement shall comply with all applicable laws, regulation and policy.

b. Buyer warrants with respect to itself only that:

i. It has the legal power and authority to enter into this Agreement;

ii. It will perform its obligations under this Agreement in a timely manner, in good faith and with all due skill and care;

iii. To its knowledge, no action or relationship described or contemplated by this Agreement (including Buyer’s ownership of a domain name purchased at the Auction) infringes, or will cause to be infringed, the intellectual property rights of any third person; and

iv. Its performance under this Agreement shall comply with all applicable laws, regulation and policy.

OTHER THAN THE EXPRESS WARRANTIES ABOVE, THE PARTIES ACKNOWLEDGE THE ADVANCED AND SPECULATIVE NATURE OF DOMAIN NAME SALES AND AUCTIONS AND UNDERSTAND THAT NO GUARANTEES OR WARRANTIES CAN BE MADE OR EXPECTED WITH RESPECT TO THE VALUE OF A DOMAIN NAME OR THE SERVICES CONTEMPLATED HEREIN. EACH PARTY THEREFORE DISCLAIMS ALL WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, WITH REGARD TO THE SERVICES PROVIDED UNDER THIS AGREEMENT, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR THE PARTICULAR PURPOSE, AND EACH PARTY AGREES THAT THERE ARE NO WARRANTIES CREATED BY COURSE OF DEALING, COURSE OF PERFORMANCE OR TRADE USAGE. IN PARTICULAR, NEITHER PARTY WARRANTS THAT THE PERFORMANCE OF THEIR PORTION OF THE AGREEMENT WILL BE UNINTERRUPTED OR ERROR-FREE.

9. Indemnification:
Buyer agrees to indemnify, defend and hold harmless Oversee.net and Moniker and its subsidiaries, officers, directors, employees, agents, successors and assigns, at its expense, from any and all third party claims, actions, damages, liabilities, costs and expenses, including reasonable attorneys’ fees and expenses, arising from or related to any breach of a warranty or failure to perform any covenants required of it under this Agreement.

10. Limitation of Liability:
IN NO EVENT WILL EITHER PARTY BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, LOSS OF BUSINESS, REVENUE OR PROFITS EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. EACH PARTY’S MAXIMUM LIABILITY TO THE OTHER UNDER THIS CONTRACT, WHETHER BASED IN CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHER LEGAL THEORY, WILL BE THE RECOVERY OF ACTUAL, DIRECT DAMAGES UP TO A TOTAL OF THE WINNING BID AMOUNTS WITH RESPECT TO THE DOMAIN NAME(S) AT ISSUE.

11. Governing Law, Venue:
This Agreement will be governed by the laws of the state of California, without reference to conflict of laws principles. The parties agree that jurisdiction and venue for any action arising out of or pertaining to this License will be proper only in the state and federal courts located in Los Angeles, California.

12. Modifications:
All amendments or modifications of this Agreement will be binding upon the parties despite any lack of consideration so long as the same are expressly agreed to by Seller and Moniker. It is expressly agreed that no usage of trade or other regular practice or method of dealing between the parties will be used to modify, interpret, supplement or alter in any manner the express terms of this Agreement.

13. Miscellaneous:
The parties are independent contractors and do not intend to create any partnership, joint venture, agency, franchise, sales representative or employment relationship between the parties. This Agreement constitutes the entire understanding between the parties relating to the subject matter of this Agreement and supersedes all prior writings, negotiations or understandings with respect thereto. No modification or addition to this Agreement will have any effect except as set forth in Section 11. Notice must be given to Moniker at the address set forth on its web site and to Seller at the administrative address listed in the Seller’s account. Notice will be deemed to have been received upon personal delivery (including confirmed fax), one day after mailing by nationally known overnight carrier or five days after mailing by certified mail, return receipt requested. The section headings appearing in this Agreement are inserted only as a matter of convenience and in no way define, limit, construe or describe the scope or extent of such section or in any way affect such section. “”””

Ok so that was the bidders contract for Moniker.com, which you sign before you get a paddle.

Each auction house will have their own contract, which you should of course read as well in advance, and seek out legal advice on, if your planning on bidding.