OK domainers it time to go back to the basics.
You can only sell a domain once.
If you agree to sell a domain and the buyer pays you, you have a done deal.
You have to transfer the domain or you can be sued.
and Yes e-mail’s count.
It Seems obvious to me but, I realized this was not the case with many domainers, when our good friend George Kirikos alerted me to the story that the first buyer of CamRoulette.com was suing the original seller of the domain and sent me the link to the discussion on the DnForum.com (post is now closed and taken down)
When I read through the post on DnForum, I almost fell off the chair.
This story needs to serve as a wake up call to domainers who don’t seem to know the most basic principals of contract law.
If you agree to sell a domain and the other party accepts you have a contract.
If the other party then pays you they have performed on the contract, done deal.
In the case of CamRoulette.com he is how the original Seller describes the transaction in detail in the forum post:
“””Let me start by stating that I am a 20 years old. I’m self-employed and I am a high school graduate. I have a strong passion for the entire umbrella of internet marketing: be it affiliate marketing, PPC advertising, domaining, etc. I’ve been using the internet to make money since I was about 17 and I’ve always loved it.
Last year on the night of December 12th, I discovered ChatRoulette. Immediately I recognized that this was a pretty unique website and that it could grow. Maybe I’m ignorant, but with the platform of the site (being as it is not adult in nature) and the estimation of the bandwidth bill (wasn’t aware that in Flex, the cam-to-cam bandwidth is passed peer-to-peer), I was not under the impression that it would be worth millions. I could see the Alexa Top 100,000, but today it’s almost within the Top 1,000.
Upon some playing around on ChatRoulette, I decided I had some extra money and I’d like to invest in a site very similar. I thought of some little personal touches that could be added to improve the idea of the site right there on the spot, so I went and reserved my domain name. I ran a WHOIS on the domain name c*mr*ul*tte.com and saw it was unregistered. As the primary function of the website it to cam, and not to chat, I figured this made more sense. I spent less than $10 at Dynadot registering c*mr*ul*tte.com and I was prepared to make my little ChatRoulette clone site.
Months passed and I became increasingly busy. I never got around to developing the website and camroulette.com just sat. Exactly two months after hand registration, I received my first offer. It was $275 if I recall, an offer from a guy in Canada. I hardly considered it, but within the next two days I received another offer. This offer was from who we’ll call Person A. Person A offered me $700 for the domain. At that time, I was confused as to why after two months I was receiving absolutely no offers and then within two days I’ve received two. I figured maybe the domain was posted on a forum or something and a few people got an itchy trigger finger and wanted to gamble on the domain. With that in mind, I told Person A that I’d sell him the domain. I actually went as far as to request the $700 payment via PayPal that night.
When I woke up, things were different. The $700 invoice had been paid. I began looking into Dynadot and I was confused on how to push the domain. I haven’t used Dynadot so much. In the midst of this confusion, I received another offer, from Person B. This offer was for $1200 (I’ve confusingly cited this offer as $1400 on NamePros and a few other places, the offer was $1200). Upon receiving and confirming the offer, I refunded Person A his $700. I told Person A I was a little unsure of things and instructed him not to pay me again unless the domain was first in his account. I then decided and went through the transfer and sold the domain to Person B. He sent me $1200, I sent him camroulette.com. For a day or two, Person A was asking me what was going on. I was extremely busy and didn’t respond to any more emails from Person A.
A month passed and ChatRoulette hit local news stations, CNN, Jon Stewart, everything. Person B resold the domain name for $151,000, to put it in short.
This made me feel completely stupid. I was depressed about the whole situation and still today I question why I made any agreements to sell the domain and actually acted upon them. $151,000 would have done so much for me, but a deal was a deal. I sent him the domain, he sent me the money, and to me that is what signifies a deal and contract. I’ve thought on this enough so I won’t sit on it too much here, but it gets a whole lot worse than this.
On the 13th of this month, I received a letter via FedEx. I am now being sued by Person A for breach of contract in fraud, as I had previously agreed to sell him the domain name. The demand on the lawsuit is $150,300 (the difference between the resale price and the price I agreed to sell it to him for). To make this situation harder on me, I live in Florida. I am being sued in the state of NY, and I would have to appear in NY. I’ve never been on a plane and I don’t even think I can afford the travel and attorney fees. The man suing me is a millionaire. He is a gold medal Olympian and he sells diamonds to celebrities. He has a lawyer who has worked for major registrars and operates under one of the most respected firms in NY.
I am just lost here. I’m 20. I have 4 figures to my name. I’ve spent ~$500 in consultations, one with a local attorney who laughed at me and told me I was “screwed” and would need an NY attorney, and an NY attorney who told me that this guy would eat me alive and my best chance is to plead guilty and file for bankruptcy to save myself the stress of travel. I don’t know what to do here. When I look back on the incident, in principle I feel as if what I did wasn’t very smart. I had no idea I was entering a binding contract by exchanging those emails, it was like a casual sale to me. Obviously I had no idea this would blow to a 6-figure ordeal. I don’t want to sound desperate, but I feel like a minnow who is now being swam around by a shark, a 40-year-old guy with an amazing life and all the money in the world, and now he wants every cent I’ve ever had and wants to put a huge scar on my life over a domain name. In the complaint (which I will attach if requested) he cites me as the owner of www.TheCraigSnyder.com – a publisher and consultant. He is very likely under the impression that I have $150,300 and that I am around his age, as if that matters, but that’s not my situation.
I can’t fly back and forth to NY to defend a case I don’t even have a shot with. I don’t even think I can afford a lawyer to aid me through the process. Emotionally, this has troubled me so much recently and I don’t know what to do at this point. I feel as if all I can do is ignore these court demands coming to my home (I live with my parents) and wait until eventually I’m seen as “guilty.” When the demand of $150,300 comes, I file for bankruptcy and put a huge hole in my financial life.””
So lets recap.
The Seller agrees to sell the domain in writing through a set of e-mails for $700, tells the buyer to paypal the funds which the buyer does and then the Seller decides not to sell to the first guy because he received a higher offer which he accepts from the 2nd guy and then suddenly figures out how to transfer a domain at Dyandot and does so.
Sorry Seller.
You lose.
If there was any question about the case before, your post on the forum doomed you.
Now I’m not going to get into the issue of damages. This is a little more complex and outside the scope of this article.
Besides the problem is bigger than just this one instance.
Almost more surprising than the Sellers post is some of the responses to the post.
Comment 1:
“”I don’t think the guy would have a case honestly. Just because nothing was in writing.”
Comment 2:
“email is not binding. personally i’d want to fly to NY just to beat the living shit out the person suing me… bad enough you lost out on a huge sale but now some sorry loser prick is suing you for it? good god. good luck man.”
Comment 3:
“”I am not an attorney but if he is going to sue you he needs to prove that he lost money. You refunded him the $700 so he didn’t lose any money. Potential income means jack (anyone can say “well, I could have sold it for $$$”). Emails can also be easily manipulated and I don’t think they’re normally taken in as evidence. I wonder if you win the case if you can sue him back for all your legal fees?”
Comment 4:
“”This is a bunch of bullshit. Any lawyer worth their salt will tell you that since you refunded Person A the money with no loss whatsoever”.
Wow.
Really you believe this?
Ok boys and girls.
First of all in theory you don’t need a written instrument to have a contract.
You can have an oral contract for most assets.
Of course with an oral contract your going to have a hard time proving it unless maybe there were witness who heard it.
Second of all, an e-mail is written instrument.
Yes an e-mail is written. Not hand written (although a hand written piece of paper can serve as a contract as well)
A series of e-mails becomes a string of written documents evidencing the sellers and buyers mind set and certainly can become a contract.
Now if you want to claim that you didn’t send the e-mail, that someone hacked into your account or sent it from an e-mail you didn’t control then that’s a matter for the jury. But if you aren’t claiming that type of defense and admit the email were sent and received then you can have a contract based off of them.
Buyer’s have rights and don’t hate on them for pursing their rights.
For the record the following are not defenses to breach of contract:
I’m only 20 years old.
I don’t know what I’m doing.
I got greedy.
I made a mistake.
I have no money.
Also its probably not the best idea when your involved in litigation to go discuss it or post about it on the net.
He is a final comment from the Seller:
“”I would understand if I listed this domain on Sedo or some other domain marketplace. He sent an email to my personal email address that he snatched up from the WHOIS information. My only intent to sell was after I received an offer; it’s like someone came and knocked on my door offering to buy something, it’s not as if this was put up for auction at a local marketplace””
Funny the Seller mentions this, because this is exactly what happened in another situation involving not 1, but 7 domains which looks like maybe heading to litigation.
In this case the winning bids totaled almost $200K and involved several different buyers.
In that case someone listed domains for auction on Sedo, allowed the auctions to conclude with sales, and after decided it was all a mistake and he is refusing to follow through. (since the seller is not officially in default I’m not going to discuss the exact domains, but will when and if the seller goes into contractual default)
Bottom line.
We all hate deadbeat bidders at auction.
There isn’t one domainer who is going to stand up and defend the guy who takes your $500 bid on a domain to $2,500 making you pay $2,600 just to find out he had no intention of paying the $2,500. Nor will you find one domainer who will defend the guy who bids $2,500 wins the auction and then doesn’t pay for the domain.
Domainers have no tolerance for dead beat bidders why do they defend non-performing sellers?
sounds to me looking through the “i dont know how to use dynadot ” story you backed out of a deal to sell to the higher bidder and you said “dont send me the money until i figure it out ” implying he was still who you were going to sell the the name to but you still went with the higher bidder which IMO makes your story sound like bullshit. Honestly sounds like you welshed on a deal period very bad form . i wish you luck with the lawyers but the bankruptcy thing sounds like the route you will have to go . I wouldn’t ever do business with someone who pulled these shenanigans .( i’m no lawyer but it looks pretty clear and cut )
999 times out of 1000 you can get away with this stuff but this time around… Wasn’t so lucky 🙁
This will definitely get ugly.
I think exactly as you Mike and I admit I was suprised by the comments of those who looks to endorse these bad practices in the DNF thread.
Here the seller has NOT been correct.
If we all act like him domaining will a mess!
This is why I don’t find any excuse to defend this poor guy.
Be fair, be serious and think twice before approve a sale (as buyer or seller).
It’s bad moderation for DNForum to have censored the thread like that. You can’t unring a bell. The initial poster *volunteered* the info. After that, it was trivial to find the actual lawsuit on PACER, which is in the public domain.
I agree with the opinion of the first lawyer he consulted, that basically he is “screwed.” He backed out of a binding contract, in my opinion, (i.e. I don’t think the Statute of Frauds or Uniform Commercial Code would help the seller avoid his obligations) and I have no sympathy for those who don’t honour their agreements. The only issue now is damages, in my eyes. The first thing he damaged was his own reputation, and that is worth far more than gold to most people. Any future employer who does a proper search will discover his past dealings, etc.
He never did sign anything.
I don’t know what the law says about emails or just talking.
The emails will definately hurt him if they count as binding.
Steve
http://en.wikipedia.org/wiki/Uniform_Electronic_Transactions_Act
http://www.w3webbiz.com/2009/04/is-email-legally-binding-contract.html
http://www.real-estate-online.com/articles/art-271.html
The fact that he sent the Buyer a Paypal Invoice and it was paid that evening – should have been end of story.
Deal Done…
He then choose to refund for a better offer…
I feel sorry for the guy if he is only 20 and about to be bankrupted over this but he is 100% at fault… IMO
I dont know if the buyer would get $150K but still be an interesting one to watch to see the final outcome…
Somehow I think the case will get dropped and wont make it to court …
First and foremost, I read the DNForum thread and I think it’s somewhat of a mess. I think Snyder does owe somewhere between $700 and $1200 and he made a mistake that he’ll surely never make again. Suing for speculative gains is silly, courts don’t exactly operate on “what if” law.
With that out of the way, this is one awkwardly offensive and poorly-structured post. Are you arguing that this kid is not going to win the case? Did you read his entire post? He was looking for advice from people, he was not pleading for people to get on his side. He was asking for help, asking where to find an attorney who would be able to help him when you’re down at his level, a less-than-wealthy high school graduate (apparently). There’s no need for this weirdly aggressive article, judging by his posts the kid seems very kind-natured and underestimated the entire situation. Do I condone backing out of an “agreement”, be it on paper, by mouth, be email? No. However, holding him to $150k over an alleged accepted offer of $700 is inhumane to me.
Furthermore, to George Kirikos, your posts on page #3 of that thread are just as aggressive and strange in nature. If I recall, you went through the trouble of researching the case on PACER and publicly outing the kid when he did not want to release anyone’s name and then in your next post you claim that it’s going to be all over blogs, as if some dastardly lurkers are going to sweep this up and then report it to places like this. You even linked an article as if to say “I told you so!”, I mean, why not just state that you’re running around whispering in ears and trying to make as big of a deal out of this as you can all by yourself?
Like I said, stupid move(s) on part of Snyder but not worth $150,300 in a court room. And quit linking the UETA, learn about the case before you reference something that isn’t even active in the state of New York.
“STEVE: He never did sign anything.
I don’t know what the law says about emails or just talking.
The emails will definately (sic) hurt him if they count as binding.”
Now you know. Luck you the advice cost you nothing. Emails count. No formal signature is required. An “X” can be a signature – so can sending an email.
There is NO such thing as a “formal” contract – a contract is a contract is a contract is a…..
Behavior also counts. If you act as if you have a contract with someone then the other side can rely upon there being a contract. Example. I offer you $500 for your domain ABC.com. I send you the money. You use it. You don’t send me the domain. You never sent me an email or a “signed” writing” accepting the offer but you took my money. I can sue you for breach of contract. It is up to you to defend the claim by (for example) arguing that you thought the money was a gift from heaven.
The same behavior concept counts in modifying contracts. If you act as if the contract was changed then the other side can argue that it was in fact changed.
When I first got into this industry (back in 1997) people did deals on handshakes and bar-side conversations. Those were still contracts. The domain world has become more serious and thus more written agreements are required. However, if you make the deal orally over a glass of beer, it remains a contract. As the author mentioned, the difference between a written agreement (again emails are written) and an oral contract is largely a matter of proving what the terms of the agreement were.
Tom
“Are you arguing that this kid is not going to win the case?”
The kid is in breach of contract.
I specifically said in the post that I was not going to deal with the issues of damages, that it was a complicated issue.
Did you read his entire post?
Yes I did
Do I feel sorry for him?
Not in the least.
I was motivated to write the post not so much because of the kid but because of the comments which clearly indicated to me that a lot of domainers do not understand anything about contract law.
This is also not a once in a lifetime case, I’m pretty pissed off at the guy who wants to walk away from 7 auctions totally almost $200K.
Domainer need to understand there are ramifications if they fail to perform on domain sales
Tom: The time period between the domain transaction and the auction for $150K was very short. It’s up to a court to decide how much the domain was worth in February, but it’s certainly a lot more than what he was buying it for. That’s what damages are, the opportunity cost of the reneged deal. Take a look at the Facebook debacle (i.e. stolen code, etc), for example. Did they use the valuation at the time of the settlement, i.e. when the site was highly successful, or did they use some low valuation of “any old dating site.”?
As for “outing” someone. He outed himself! He mentioned the exact domain name involved in a *public* forum. I spent 2 minutes to find the case. The case is in the public domain. It was no trouble at all, and allowed people to discuss “facts”, instead of hearing just one side of a story for someone looking for sympathy. These legal cases are highly educational, and I’ve posted similar cases going back for years. They’re very beneficial to the community. Go check the legal forum on DomainState and you’ll see similar threads going back many years.
If you have a “problem” with my post…..that’s your concern. Give me 1 good reason I should care what you think about anything? How can you call it “whispering”, when I posted it directly in the actual thread? With my actual real name, too, unlike someone who posts anonymously to this blog as “Tom.”
I am STUNNED at those DNForum posts!!
Those pro-Snyder individuals should be showcased on an “ignorant watch list.”
MHB — Please correct me if I am wrong —
When the Plaintiff wins this case, the current CamRoulette.com owner will forfeit the url, Snyder pays the monetary damages. Then, the current CamRoulette.com owner will likely sue Craig Snyder for damages, as well.
William
“”the current CamRoulette.com owner will forfeit the url””
No
The current buyer bought the domain is due course without knowledge of any issue (the case was filed after the owner bought the domain) so he couldn’t have had knowledge.
The current owner is fine and not involved.
The kid is going to have to pay damages for breach of contract and as I said several times I’m not going to get into a discussion on how damages should be computed in this case as that is for the court to decide.
Of course if the kid does not defend the suit because he doesn’t have the money to do so, the plaintiff will almost certainly get whatever he asks for and a judgment will be entered.
Its amazing that there have not been more of these types of lawsuits over the years…I have to wonder if this goes thru, what the precadent sets for domain auctions, etc…I am sure everyone has been on the other side of selling a domain to a buyer who does not perform
I think the gentleman suing for 150k+ is going to have a tough time ever seeing a financial benefit from this lawsuit, its hard to imagine a judge not taking into consideration the age of the seller, circumstances of the sale, etc….laws may be black and white but courts may try to find a grey area to make this go away as their really is no way to reconcile the damages at this point.
The complainant is suing for $150,300 as “award for damages for fraud” – not as punitive damages, which is to be extra. Surely this is what the whole case will be based on. The complainant never lost $150,300 through whatever valid contract he had. If the current owners of camroulette.com sold it tomorrow for $2 million, would the complainant up his demands?
MHB, I am reading the context of the original post and he is not asking for sympathy. He isn’t asking if he is right or wrong. He posted that post in a domain name attorney’s subforum. He is asking for advice and where to turn to, the guy wants to properly defend himself. That’s the only point I’m trying to convey here.
Let’s not misconstrue this and treat it like he was posting on the forum and begging for people to side with him and tell him he’s safe, he stated he’s spoke to other attorneys and he hasn’t come too far with them. At this point, he is probably feeling desperate and cornered by someone twice his age and experience, suing him from a state he cannot even afford to fly to. He posted in a domain lawyer’s subforum asking for someone to point him in the right direction and a few people did that, I just hope he can afford to take their advice.
Acro: Let’s suppose I pay you $1 to go to the store to buy me a lottery ticket. You buy the ticket, and email me a list of the numbers that were randomly picked. But, you don’t give me the ticket, you hang on to it, for whatever reason. The next day, the newspaper publishes the list of winning numbers, and the ticket is worth $100 million.
You refuse to give me the winning ticket. You decide to keep it for yourself, and go and collect $100 million (or you sell it to someone else for $20 million).
So, do you owe me $1, or do you owe me $100 million, for breach of our contract?
William wrote “Those pro-Snyder individuals should be showcased on an “ignorant watch list.”
Well, hopefully this is educational to all. Personally, I like to see those who “out themselves” on forums suggesting things like emails don’t constitute a binding contract to them. I make a reminder to myself “Hey, if you’re going to ever do business with that person, you better be careful.” For some people, their word is their bond. For others, they appear to look for every avenue to get out of a deal, if it would give them a short-term benefit.
This is timely, because on Saturday ICANN released a report from the “Inter-Registrar Transfer Policy Working Group” with a proposal for an “Expedited Transfer Reversal Policy” (see Domainstate or DNForum for more on this, but hopefully some of the bloggers will pick up on it soon). Basically, it would allow a domain transfer to be undone within 6 months! Buyers would not be protected, and this kind of “seller’s remorse” or attempts to weasel out of deals would become a pandemic. Not only that, but the original owner would end up with the domain *and* the cash (and then the buyer would need to take them to court, etc.). Really bad policy making, meant to address domain hijackings, but will actually lead to more reverse hijackings of legitimate deals.
George, the analogy is a bit off in my opinion. The registrant was never aware of the subsequent sale, furthermore he didn’t use the complainant’s money. In other words, he never used the $1 to buy the lottery ticket. It’d be as if the complainant, upon receiving the $1 back claimed that the original registrant was aware of the winning numbers. He never was. The subsequent sale of the domain for $151,000 is an entirely separate transaction unrelated to the first one. Even if there is a breach of contract, it never involved that amount of money.
A few pointers:
Don: The UCC does not apply because domains are not covered by the UCC.
Also, if the 2nd buyer had no knowledge of the 1st buyer, the 1st buyer could not successfully sue the 2nd buyer. The reason for this is that the law protects a “bona fide purchaser for value” in all cases except where stolen property is involved.
Don: The factors you raised would never see the light of day in a court. Age is important only if you can show a lack of intent to contract. Thus, below the legal age or being mentally infirm might be relevant. This seller was 20 years old. Naivete is not a defense to breach of contract. Damages are extremely clear in this case (see below). This matter will most likely be a default in which case there will be a judgment hounding this seller for at least 10 years unless he files bankruptcy or negotiates a settlement.
Aero: Plaintiff does not have to sue for fraud. Damages for breach of contract can be measured by the difference between the value of what you contracted for and the price you agreed to pay. Since the domain just sold for $151K, the damages are 151K – $700.00. A legal complaint can allege different theories for recovery of damages and those theories can even be inconsistent with each other. However, at the end of the day – prior to the end of trial – the plaintiff must elect his/her remedy and the court will not permit a recovery of duplicate damages. Fraud here would not fly. To prove fraud you must prove fraud in the inducement – you tricked the plaintiff into entering into the agreement. Some courts allow you to show that the defendant entered the contract with the intention of never performing but it is difficult to have a court accept that since that is really a breach of contract. Thus, fraud here (more difficult to prove since it requires mal intent would only add the potential of punitive damages – a doubtful resolution since the buyer backed out AFTER the 1st contract and did not “induce” the 1st buyer to contract for $700 via means of fraud.
There is no getting out of it the best he can do is learn not to be a deadbeat and except the ramifications of playing a game and not knowing the rules . but the part about money and age is hilarious its not like he is 5 sad way to learn but might make a good story to tell his kids
Acro: The issue is whether the $151,000, irregardless of whether it’s a separate transaction, is a “fair value” in February, irregardless of seller’s knowledge. Seller is obviously ignorant on many levels. That ignorance shouldn’t excuse him from the real damages he caused.
Let’s give a better analogy. I go to your house, and you agree to lease me your roof for $3,000/yr (we also write it up formally, written contract, etc.), for use in solar power, windmills, etc. You renege, and do it for $4,000/yr with someone else, a competitor of mine, instead. But, you later learn that your neighbour across the street was paid $50,000/yr, and the actual profit that I make from it is $100,000/yr (you have a very big house).
In my view, you would owe me $100,000/yr in damages, my opportunity cost (i.e. the actual lost profit I experienced from reneging). But, is it your opinion you only owe me $3,000/yr or $4,000/yr or $50,000/yr? Why?
>I feel sorry for the guy if he is only 20 and about to be bankrupted over this but he is 100% at fault… IMO
Yep. He’s learning contract law and ethics the hard way – after the fact
Hopefully this will turn him into an adult.
As for the complainant, I found it strange that (as he obviously knows how WHOIS works) he didn’t contact the purchaser of the domain immediately and inform him that the ownership was in question.
He waited until it had sold at auction. Suspicious. I would love to hear Mr Keating’s opinion on that.
One thing’s for sure – domain law is going to be a boom industry in the years to come, with so many ignorant people involved with them…
I think I know which direction to steer my kids in; “no – you DON’T want to be a train driver…”!
Also, plaintiff clearly thinks he’s going to get some money, because he mistakes 20yo noob domainer for the owner of thecraigsnyder.com.
Once he finds out he just spent more money filing the case than this kid has in assets (unless naivety is an asset of course) this might all get quickly settled.
The original registrant – Craig – claims that he’s not the person described in the lawsuit. In other words, the plaintiff is suing Craig based on the professional and financial status of a whole different person. Again, that’s what the original registrant claims.
On the subject of the plaintiff demanding $150,300 for breach of contract, I don’t see how this would be approved by the court as it’s not a factual loss. The plaintiff is also asking for $150,300 for “damages for fraud”. In my opinion, this is a legal trickery, seeking to merge these two identical amounts into one by utilizing such court methods and proceedings.
#
George we know that $151K is a fair value because that is what it was sold for. The damage does not depend on time – it is the difference in value proven as of the trial and NOT as of the contract. The reason being is that you contacted to buy it and could have held it. The danger in most domain cases is that there is no subequent resale of the domain or the resale is for a small increase (not worth the litigation costs).
As to the solar panel argument: Your damage (at most) would be less than 100K – gross revenues from sale of the electricity, less cost of the lease, less cost of putting the equipment on the roof. The amount that the neighbor gets paid is irrelevant. A messy example that is not really similar to a straight domain deal.
The important lesson is that a simple failure to understand how contracts work can cost you dearly. In this case the seller ends up with -15o,300. Everyone else ends up with a profit.
Good night all (from Spain)
Acro
Well the kid might have been misidentified in part, yet he’s been served so they found the right guy to serve.
Any of those type’s of allegations will be worked out in an amended complaint.
Once again the point of my post was well beyond the facts of this particular case and goes to informing domainers on basic contract law which the comments proved many don’t understand.
Believe me you don’t want to be defending a case where there is no issue on liability just on damages.
I am wondering how Person A is going to prove that HE could have resold the domain for $151,000.
“I am wondering how Person A is going to prove that HE could have resold the domain for $151,000.”
Or mainly I meant any amount after he obtained it. It is entirely possible that the buyer from Person B would have never crossed paths with Person A, resulting in no $151,000 sale for Person A had he obtained the domain.
Paul, if the case is indeed that the fair value is determined at the time of trial, then again what stops the plaintiff from demanding e.g. $2 million if the current owners sell it for this much? And this is not a chunk of gold that can be resold as commodity at any pawnshop; it’s a domain that requires special skills to resell at a higher price. If the plaintiff alleges that they wanted the domain in order to develop a web site, then surely they were not seeking a resale, much more to the amount of $151k achieved by Adam Strong. The entire case reeks of an attempt to capitalize on the public fame the camroulette.com sale acquired; not on some actual loss.
Paul: I’ll have to defer to your expertise in the damages calculation, but I know for a fact that in some cases/jurisdictions there is a definite “Valuation Date” that is different than the trial date. For example, in a divorce where the assets are split 50:50. If the house was worth $500,000 on the separation date, and the stock in the husband’s company was worth $1 million, that means the total family assets were worth $1.5 million, and the wife is entitled to $750,000. If the company turns into the next Microsoft between now and the divorce date, the wife is still only entitled to $750,000, because the valuation date was the date the couple separated. If the stock tanks and goes to zero, the wife still ends up with $750,000 (more than the entire value of the assets at the trial date; the house might have lost value too). Common law or statutes might vary a lot, though, in different jurisdictions.
On further thought given my lottery ticket example, I’d probably go more with Paul’s analysis!
Some info about the guy behind the lawsuit:
http://fraserdb.com/fraser.html
The plaintiff is claiming they were purchasing the domain to develop a site, so I don’t see how he can argue damages of $151k. He would need to prove what the developed site could have earned, which is quite subjective.
Until the Domain Madness auction, the highest sale price was $1,200. Before that, the domain would have been sold for $700 and developed. Because it was purchased with the intent to develop, I think it is safe to assume it never would have been in the auction, and the value would be $1,200. Anyone in the industry appraising the domain name would have put it in the $xxx – low $x,xxx range.
Even if the plaintiff does successfully argue damages of $151k, it’s pointless because the kid doesn’t have that kind of cash on hand. Judgment will be entered, the kid will claim bankruptcy (no recovery), plaintiff will be worse off after legal fees, and kid won’t be able to get a decent loan for a decade. Nobody wins.
I can’t say I feel sorry for the kid either though. Sure, he sold a domain for $1,200 that then sold for $151,000 and he felt like a retard. Then after profiting $1.2k he gets sued for $151k and will likely end up in bankruptcy before he’s even old enough to have a beer. But he brought it on himself by reneging on the deal, he could have walked away with $700 (nice return on a recent hand reg) and called it a day. This will be an expensive lesson for him, but an important one.
This is definitely an informative blog post. While I agree that not honoring the original transaction was the wrong thing to do, I honestly did not know that e-mails could be considered legal binding documents. This post will save someone a lot of headaches and revenue down the line, thanks for posting the information.
P.S. I think the righteous thing to do would be for the second seller who flipped the domain for $151,000 to throw the kid 10 grand for his legal defense.
I’ve had a seller “pull out” after a completed auction at Bido where I was the winning bidder. I know this happened to other people as well (vodka.in for example). Honestly, I have no pity for the seller and I was surprised at myself at the rage I felt when I saw the domain I had “won” but never received ended up going up for auction on another auction house.
Of course this seller is compounding his problems by not responding to anything and just waiting to be told he’s guilty so that he can declare bankruptcy. If he had only “not sold” the name through bido, he would have only had to deal with his account getting banned 🙂 Just kidding. He’s neck deep in it.
Dean
Why should the 2nd buyer throw anything in the pot for the kid’s defense. I mean what did he do?
The 2nd buyer just bought a domain without knowing anything about their being a 1st buyer
To err is human and everybody makes mistakes in life. I hope he would learn from this lesson and will not get lost. He should apologize the first buyer for what happened explaining about the possibility of bankruptcy if the case continues and to reach some agreement outside the court.
One can do a search in Google for craigsnyder at gmail.com (i.e. properly formatted) and there are 18 matches.
You can also search for his name and city, for other matches.
No sympathy at all, sorry.
George, you’ve went from taunting the kid with “Ooh, this will be big in the blogs!” on DNForum, to dropping specific names of people when the kid was trying to be as discreet as possibly while maintaining the facts of his problem, to running to little beat blogger sites with opiniated stories, to posting people’s email addresses with some sad excuse for anti-spam measures (If you weren’t aware, ‘at’ is just as easily harvested but I think everyone knows that. You just probably don’t care because I guess that’s the sort of person you are). I really think it’s time for you to call it a night.
Tom: You’re making this about “me”. It’s not about me at all. It’s about people being overly sympathetic to someone when if you did the research, you should not be. A lot of folks are gullible. I’ve not used any information at all that’s not 100% public. His email address was in the WHOIS history and also already in Google (how do you think there were matches?), so have already been spidered. How do you suggest I tell people how to find the relevant URLs, via telepathy?
Go do the searches, and come back and defend what you term a “kid.”
here is namepros.com link and more info..not down..
read this and previous owner posted here as well.. i suggest reading this before it gets deleted..
http://www.namepros.com/industry-news/646657-camroulette-com-sells-for-151-000-a.html
Or is it about overly zealous individuals who worry too much about things that don’t concern them, George? Regardless of using public information, you do not know the seller. There is no reason for YOU to be researching him because the seller, the buyer, or the court case is not any of your concern. You’ve gotten your 10 seconds of fame via this article, it’s time to throw in the towel.
Is the seller in the wrong, of course. Should something be done about it? Of course. But, coming from someone who is faaaaaar from a bleading heart, perhaps what it looks like his punishment is going to be may be cruel an unusual (IMHO). I buy his story, and true ignorance to the law is no excuse, but seriously force him to bankruptcy? Ehhh maybe it isn’t so bad, and then again wha other reasonable punishments could tere be anyway?
I do think it is BS to sue for the $150k as if Person A definitely would have sold it at that price and made all the same decisions as person B that led up to that sale. That’s bullshit. Sounds like Person A wants to thrive off someone else’s accomplishments a little. I’m not saying that person A didn’t get screwed, coz he did, but hard to say he for sure go screwed out of $150k. Maybe he would have wanted more and the domain wouldn’t have sold? We’ll never know.
Best case scenario here is person A is awarded some kind of reasonable aid that they are happy with and the seller recieves whatver the appropriate consequences are deemed to be.
Check the WHOIS for reddit (dot info), getfareelancer (dot com) and hamptoninnandsuites (dot net, in the WHOIS history for say early 2010), for starters, Tom. Still sympathetic? You described him as: “kid seems very kind-natured and underestimated the entire situation”
I think he fully understood what he was doing. The only thing he appears to have underestimated is that the person he messed with didn’t ignore things, and instead is seeking justice through the courts.
Rokstar: people backing out of transactions — that affects everybody in the domain business, and business in general. I’m free to comment on it as much as the next person. This isn’t TMZ.com, where folks talk fluff, this is serious business. If you want to put your head in the sand, or sing kumbaya, go ahead. Others want to be educated.
I do kinda feel like seller has already been punished a little so far just knowing how bad he blew it with the domain. He’s never gonna forget that dose of karma. So yea more salt in the wounds is good but how much?
Looks like this is your attempt to be the next Perez Hilton of the domain business.
Guys
There is no sense picking at George.
Believe me George stands up for domainers rights harder than almost anyone else on earth and if not for him most of us, including myself would be in the dark as ICANN proposes policies trying to screw domainers.
The guy made $1,400 …. He made the decision, he has to live with it.
@George,
FYI – “irregardless” is not generally accepted as a word in the English language. You mean either “regardless” or “irrespectively”. Pick one or the other but don’t combine them.
http://www.merriam-webster.com/dictionary/irregardless
Thanks,
Logan.
@Logan I saw that too…
Just did some quick investigations, seems he was in trouble before on one of his other sites?
http://www.moneymakerdiscussion.com/forum/dating-promotion-methods/14374-mushroomcash-info-shaved.html
Oh, and he owns HamptonInnAndSuites-net.
He also had another project with angry clients. http://www.moneymakerdiscussion.com/forum/dating-promotion-methods/14374-mushroomcash-info-shaved.html
Thanks. I guess we’ve exhausted the topic when we’re debating grammar, instead of the main issue (although http://news.cnet.com/8301-17938_105-9796217-1.html might entertain the grammar and typo police).
In any event, today is Memorial Day in the US. Folks should pause a moment and reflect upon the true heroes, those who died to bring us the freedoms we all enjoy around the world, including the freedom to debate issues of great importance, and also of low importance like my typing. 🙂
Those true heroes and their families made great sacrifices, and those are the “victims” — I’ll save my energy, words and sympathy for them. And let’s not forget Fraser Brown, the complainant. Someone posted a link earlier to his bio. He’s the victim here, and should be applauded for the time and energy it takes to go through with a court case. In some folks’ eyes, he’s not “sympathetic” because he’s rich and successful. It’s not a crime to be rich and successful — he appears to have earned it through hard work (I don’t know him personally). He might have plans for charity, donating wealth to good causes, etc. No one thinks that because of action X, some totally separate innocent bystander (like a church or charity) is going to have to do with less.
A lot of “rich people” lost money in the Bernie Madoff, and (although that’s totally different, criminal vs. civil), I’m sure there were some folks who were not sympathetic to a bunch of rich guys losing money. But, then they heard that charities too got wiped out, foundations had to close, etc., i.e. they got more information, and they understood better. So, I’ll save my sympathy too for Fraser Brown. He’s not some “Goliath” fighting a “David”, he’s just a victim seeking justice using the only means open to him, the law.
I can’t believe some attorney charged him $500 for a consultation without at least telling him there is NO WAY he is going to be on the hook for the measure of damages being sought here. By breaching the first alleged contract, this guy enriched himself to the tune of $400 – and that’s it.
Right or wrong I still feel bad for the guy.
I think the original buyer should drop the case.
I would never ruin a young kids life over something like this.
Interesting article from the NY Times published yesterday indirectly related to the topic of this blog post. The little guy vs the big guy on the internet:
http://www.nytimes.com/2010/06/01/us/01slapp.html?hpw
Dean
The article has nothing in similar with this situation
>Believe me George stands up for domainers rights harder than almost anyone else on earth and if not for him most of us, including myself would be in the dark as ICANN proposes policies trying to screw domainers.
+1
George is the LAST person a domainer should be complaining about.
If it wasn’t for him, Verisign/Snap would be running their patented “parallel registry” right now, and you noobs would be paying through the teeth for your domains.
And if you think he’s doing it for 15 minutes of fame, you’re way wrong. so pull your heads in.
Plaintiff eventually developed the same “chat roulette” concept at:
SpinTheCam dot com
Get a perspective.
Would this case have been brought about if domain eventually sold for $2500 or not at all…?
Would this case have been brought about if plaintiff knew the seller doesn’t have a pot to pi$$ in?
The plaintiff must think this Snyder guy is a Schilling or Ham…a deep pocketed whale.
If plaintiff goes thru with action, he gets a pyrrhic victory: Snyder files for bankruptcy, plaintiff gets nothing but wasted money & time.
Move on…no point in trying to get blood out of a stone…
ahh,,, /Drew… I think some others had a hand in quashing the “parallel registry” thing too… ahem. 😉
Im glad JB echoed what I was thinking. The contract was for $700. The maximum damage therefore is $700. Without any terms or stipulated conditions of sale linking any future sale of the domain, there is no way that the breach by the now defendant can be linked to the plaintiff’s loss of $150k plus. In the very least because he was not able to foresee the Plaintiff’s extended loss or, for obvious reasons, was not party to the real value of the domain.
But yes, I guess the spirit of the post is correct, offer, acceptance & consideration (the cornerstones of all contracts) prevails whether the contract was formed verbally, via email or written on the back of a cigarette packet.
In the domaining world its more often a case of caveat venditor… as opposed to caveat emptor
I would agree with JB. I was also thinking that the damage done was $1200 – $ 700 = $500. The seller didn’t know it would be sold for over $150,000 in the future. If he knew, he would not have sold it in the first place.
MHB,
get the corncob out of your ass…
Julia,
I think you nailed it on the head!
Lol! This is nonsense.
Fraser can not do anything!
Because Fraser (refunded) accepted PayPal refund.
Domain market is so flexible, you can sell a domain 1 million or $10 just, it depends..
After that domain sold over $151k
Fraser wants this money, lol!
Did Fraser pay 151k, NO! They paid $700 and they refunded!
If this domain value $151k why they paid $700 for it?
Fraser is not original owner of this domain and Fraser wants $151k for what?
And how come they want $151k from original owner?
Nonsense!
Not logical!
If they got a proper selling contract with original owner of this domain, I can understand this and I could say Fraser should have a right.
But they have not any thing, but they have money and they think they can do anything!
Nonsense!!!
I agree the seller should have followed through with the first buyer and is in the wrong to accept an offer and then refund it because a higher offer presented itself. I don’t think the seller would be liable for the $151,000 though unless you can 100% prove that the buyer at $700 would have had the domain in the same exact auction and had the same exact buyer for $151,000 which seems hard to prove. Even if this does get a judgement at $1400 or $151,000 the fact remains that if the seller is telling the truth about his financial status we will see a judgement and then he flies back home and pays a bankruptcy attorney $1000-$2500 to bankrupt and the judgement will be removed and the first buyer will unfortunately waste a few grand in the process of chasing money that doesn’t exist.
A more interesting thought is, can he force the return of the domain name back for the $700.00 that he did pay. The theory now is, that he, once he paid the fee for the name, had the name hijacked on him and all future sales are poisoned.
anyways, the 150k bid is very fishy to me
Julia nailed it.
And I’m no attorney, but I understand law and the “compensatory damages” claim. All the original buyer can claim is the amount he originally paid – he can’t “project value” on the domain in a court of law.
Leave the kid alone.
Yes, the original seller (‘Seller’) breached a contract with Person A.
‘Seller’ refunded 100% of the money ($700) paid to him by Person A.
‘Seller’ sold the domain to Person B for $1100.
‘Seller’ was enriched a total of $400 by breaching the contract with Person A.
‘Seller’ had NO knowledge of – nor benefit from – nor did he influence – the subsequent ($151,000) sale of the domain by Person B for $151,000.
Person A may have a claim to that $400 enrichment of ‘Seller’, due to breach of contract in the sale of the domain by the ‘Seller’ to Person B.
Neither Person A, nor the ‘Seller’, could foresee, or reasonably expect, the value of the domain to rise from Person A’s offer for the domain of $700, to $151,000 within a month, or so.
There were no contractual obligations either between Person A and Person B; nor between the ‘Seller’ and Person B (other than the sales deal for $1100).
Person A’s claim against Seller for the subsequent $151,000 sale price (less $700) achieved for the domain is spurious, and spiteful, imo….At most, he lost the opportunity to try to on-sell the domain…
….which, if he’d had the opportunity to do, may just as easily have fetched the $1100, as the $151,000…..There is no contractual connection whatever between Person A, and anyone that benefited from the sale of the domain for $151,000.
Person A is only entitled to the $400 further enrichment by ‘Seller’ from selling the domain for $1100, in breach of the ($700) contract between Person A, and the ‘Seller’
This is one for all the good guys! For all the guys that made deals with jerks like this……this guy is getting what he deserves. I hope they nail him because he did a very dishonorable thing. Also fairly common!! Unfortunately.
Secondly, listening to some of the ignorant comments about this means many in this industry better get some basic business training and what constitutes a contract. Amazingly ignorant!!
As for the damages…..that is entirely a different and separate matter. I think there can be compelling arguments on each side of this. The guy already admitted most of what you have to prove before you even begin. The fact that he is 20 does not factor in either way. I feel sorry that he is a moron….but he is still a moron. I don’t feel sorry for folks that play this game. Lesson learned for him and everyone reading about it. Glad he was exposed! Hope all the rest that do this are as well.
@Chris –
That’s all very cogent and logical. Unfortunately, juries are not. This guy better hope he can get an attorney to settle the matter for him before it goes to a jury trial (which it likely never will). He needs to get an attorney muy pronto!
Logan.
The worst thing this guy could of done is to post his story… He solidifies he had a digital contract with the first buyer. This case will make it clear to others, if you make a deal, the deal is done.
If you set a price, stick with it… I like the I am only 20 line. So that means at 20 you can’t do the right thing ethically?
“Unfortunately, juries are not.”
The permissibility of this speculative damage claim wouldn’t get to a jury.
Chris’ analysis is spot-on. There are no disputed issues of fact in this case to put to a jury, and the 150K damage claim would be junked on motions.
…of course the TRAFFIC Auction Exception to performing on a $1.4M “as is” sale is a well known legal principle, I suppose…
There’s a lot of quality, thoughtful comments being thrown around today.
@Bruce
Being 20 was never his defense and to be honest I do not know why this article conveys it as it was. In his original post, he isn’t squeeling and telling everyone how this is so unfair because he is 20 and has no money. He was asking people, in Berryhill’s subforum, what their recommendations were for him. He stated that he was 20 years old with no legal and travel experience and that he hardly had money in response to people telling him that he needs to get a lawyer from a(n expensive) firm like Lewis and Hand.
Listen, at this point I’m pretty sure even Snyder would admit that what he did was not good business practice. All he did was make the mistake of saying “yes” and for that simple and premature slip-up, you’re trying to crucify him. Do you guys think the kid meant to do this to Fraser, meant to offer a domain for $700 just to dangle it in his face when it would be resold for $151,000? Hell no, he would have never sold the damn thing. The guy is pretty smart for having the precense of mind to register the domain in the first place, and according to a post I saw on another forum about this, CamRoulette.com was his first ever domain sale – he isn’t exactly in the “domain game.” If I sell my car on Craigslist, I’m not exactly a car salesman.
I think Snyder has probably learned an awful lot during this process. The comments here are pretty mixed, apparently contract law isn’t even clear enough for experienced domainers to be able to hold a concrete opinion on. I just don’t see it being ethical or warranted to go after this kid for a 6-figure value in this situation, he’s going to have to file for bankruptcy and the next 7-10 years of his life could be very difficult just because he said yes in an email (allegedly).
Filing bankruptcy to dodge paying the judgment would also be an unethical thing to do. The guy is young — he can readily work and pay off over time any judgment the judge would file against him. He can do this voluntarily by working with the judgment holder or he can do it involuntarily by forcing the judgment holder to use wage garnishment to get paid out over time.
Edit: Well, not ANY judgment the judge would file against him, but even a $150K judgment he could pay off over many years — people do it all the time. It sucks, but it’s feasible.
“…of course the TRAFFIC Auction Exception to performing on a $1.4M “as is” sale is a well known legal principle, I suppose…”
You mean Ad.com right ? Glad someone brought that up.
I think Snyder will not suffer much. The contract law is one thing, the emails and the legal significance and enforements are another. Snyder’s honesty is in question. However,he just needs to learn how to defend himself. I agree with Tom and others that asking for help was the step in the right direction. I do not think this blog provides him the support needed. Most of the comments in this blog, including the comments of the legal experts do not make much sense to me. I am not a lawyer, but the possibility of the defence focusing on the “Unjust Enrichment” instantly come to my mind. It could be as simple as that. The suing party is seking to unjustly enrich itself. Consider the amount of the first bid and the second at the time of the transaction. The domain was worth to Snyder what he sold it for and it was worth to the buyer what he paid andwas refunded for, and not this buyer’s future gain from the domain flipping opportunity: the sale transation was not completed, the payment was fully refunded. Anything else is irrelevant. Any domain can be made priceless by this or next domain current buyer with the right capital, and it can create huge liability. Snyder should also consider the fact that domains are the “intangible assets” and that the learning about the legal implications of this kind of asset transfers are not regulated properly, and that the domain industry is not regulated properly itself. He probably knows very well that domain industry is not regulated and that many domain registrars and the aftermarket domain resellers are not regulated, and do many shady deals of the similar or even thee same kind. This does not excuse him of course. Snyder needs to keep researching his solution options until the answers are found. The party suing him is an opportunistic and predatory one. will be that of learning time, and he may become a more honest and a better person by learning from his experience.
I can’t believe you’re calling him unethical. He doesn’t even have the finances to travel to New York and find an attorney who can help defend him. How ethical is it to pick on someone like that?
It’s not unethical that he would file for bankruptcy. Right now, that’s looking like the only way he can defend himself here. The case will probably default, like someone said earlier. If he had the cash to get his own attorney, he’d probably be looking at $500-$700 in losses, not $150k. Is any judge really going to have someone work beneath a millionaire for 10 years for saying something in an email?
While regulation would increase “legal” behaviors and decrease “illegal” behaviors, it would not rid the free market of buyers’ and sellers’ unethical or immoral behaviors. The exact same outcome could have occurred if the domain name aftermarket were “regulated”. Please don’t call for more regulation — it only gives politicians and bureaucrats more power, which only adds corruption and other market inefficiencies into the mix. Just let buyers and sellers sort it out, which is what we are playing audience to right now.
The unethical nature of his decision depends on his intent. It would be unethical to file bankruptcy with the intent to avoid paying the judgment. Look, the guy will not stay 20 years old forever — he will age just like the rest of us and must pay off debts and other liabilities just like the rest of us. Why do you feel he is so special and deserving of exceptions to the same rules that the rest of us live by? He’s not a kid — he’s a LEGAL ADULT.
“Is any judge really going to have someone work beneath a millionaire for 10 years for saying something in an email?”
Why not? What does the wealth of the plaintiff have to do with the judge’s decision in the matter? How does the plaintiff’s wealth make him less deserving of a legal remedy than a non-millionaire would be? Or are you a believer in class warfare?
Clearly, this can’t be handled by buyers and sellers. When someone throws a demand of $150,300 at someone over a domain that he valued at $700, how can we expect it to be handled? This is insane to me, the plaintiff suffered no real damages. Stop your crying and continue on with your miserable ChatRoulette ripoff for God’s sake, and if the demand was reasonable (to me, reasonable would be anything up to $1200) then I wouldn’t feel the need to say that. I’ll bet Snyder is terribly sorry that he didn’t shovel you a great domain at your lowball offer just so you could either a.) completely copy someone else’s idea and attempt to profit off of it or b.) make your disgusting porn site.
I don’t mean to make this personal, but really?
http://www.belfasttelegraph.co.uk/lifestyle/diamonds-are-fraser-browns-best-friend-13963988.html
I think I’ll keep any further comments to myself because the more I look into this whole thing, the more livid I become. I don’t want to look like a “George Kirikos” here.
Logan, the argument is that his remedy should be nothing close to $150,300. If you think I am saying Snyder is a baby-faced young boy who is exempt from all punishment, then no. As I said before, Snyder should be paying $500-$700.
Logan,
I tried to bring some light to improve the understanding of the situation which I meant to finish with the sentence “Snyder’s expense will be that of learning time, and he may become a more honest and a better person by learning from his experience.” I do not see any great difficulty for him to defend himself. He should learn himself rather than hire any lawyer. Most of the lawyers cannot learn in few hours what a “domain name” is and why paying them for making irrelevant turns on the path to the settlement, and make the money out of confusion. This is what usually happens. The onus in this case is on the challenging party to prove among other things that the subsequent events after their failed attempt to buy the name has any relevancy to the case, etc, …. etc.
>ahh,,, /Drew… I think some others had a hand in quashing the “parallel registry” thing too… ahem
I stand corrected, Toonz. You know what my memory is like.
JB…..I guess if you can’t win in a court of law you have to blame me. lol
Those involved could have done a real “solid” for the industry by going after AOL. You chose circular firing squad instead.
This story points to other issues when it comes to educating young people about business, ethics and finance. Our public school systems need to focus more on personal finance and basic business skills, such as executing and honoring a contract.
Not to make excuses for the seller as ignorance is not a defense, but on some level this kid was failed at some point. I hope he ends up a brilliant domainer and businessman but this lesson is going to hurt. It may end up being the most valuable education he gets in the long run.
Also, the seller mentioned he was domaining since he was seventeen. I am not a biz law expert so I will ask a stupid question; Since 18 is the legal age for entering a contract in most states, is seventeen a legally binding age for entering a sales contract over the internet? Which state takes jurisdiction if the contract age in one state happens to be different from another?
I know it does not apply to to the story but it is something to consider as I imagine more young people entering the domain investment space considering the low cost of entry.
I had additional thought about this case: I can understand that Snyder’s personal integrity and knowledge has been in question, but there is no excuse for the “sophisticated” buyer to make unfounded statement of claim: the buyer has advisors including legal advisors and financial ability and yet proceeded with this case. Shame on them!
“You chose circular firing squad instead.”
I’m trying to connect this with some sort of reality. I do not choose what people decide to do, and the case is moving forward. So your comment about not winning a case in which I am not representing either side is equally mysterious.
The subject of discussion here is breach of contract. I don’t recall you being a party to either side of that contract, so the “blame me” comment also makes about zero sense. AOL also was not a party to any contract. You see, in a breach of contract action, two folks who were party to a contract are the folks who go to court.
The situation under discussion is pretty simple:
Did the seller breach a contract? Most likely.
Is he liable for 150K damages? Most likely not.
My tangential observation was simply about the consistency with which these so-called ethics of performing contracts is applied.
JB,
Why “Most likely not.”?
Definitely not!
“JB,
Why “Most likely not.”?”
Because the difference between an intelligent person and a blowhard is that one of them is certain.
I can’t conceive of a theory under which the plaintiff gets a $150K recovery on the facts alleged. I am not omniscient.
And that is the perpetual handicap that people with expertise have relative to cocksure idiots. Some people think the guy who pounds the table hardest and yells the loudest must be right because he is so sure of himself. Most of the time, that guy is an idiot.
George Kirikos seems to delight in exposing other people’s problems. Get a life George.
JB,
RE: “I can’t conceive of a theory under which the plaintiff gets a $150K recovery on the facts alleged.”
Thanks for the note. Wouldn’t it would be more constructive to say what theory you conceive about the plaintif’s unfounded and unjust claim? The “recovery” is not the right term to use: the plaintif’s claim is invalid, there was no loss of 150K. How can anyone prove that there was loss? Is it possible to travel back in time today? Am I missing something?
RL: Click on “Older Comments” (directly above Trackbacks & Pingbacks) and you’ll see other theories (including one from Paul Keating, another attorney).
GK,
Thanks, I have seen this: “I can’t believe some attorney charged him $500 for a consultation without at least telling him there is NO WAY he is going to be on the hook for the measure of damages being sought here.” and I also have seen this “Most likely not.”
It would be interesting to see the charges reversed: The plaintif ‘s claim does not make any sense, and JB, among others clearly stated this. The plaintif has the burden of proof. It appears that the plaintif is in trouble, and not the defendant. Am I still missing something?
RL: That obviously wasn’t Paul Keating’s comment.
Although he did refund the money , i think he is in the wrong , it’s an interesting can of worms , thanks for sharing
GK,
RE: “RL: That obviously wasn’t Paul Keating’s comment.”
The quotes provided by me were John Berrryhill’s comments at different places.
“Thanks, I have seen this: “I can’t believe some attorney charged him $500 for a consultation without at least telling him there is NO WAY he is going to be on the hook for the measure of damages being sought here.” and I also have seen this “Most likely not.”
The defendant has already confessed that he was not honest, he already had some legal expenses and it is very likely that he will have more. In effect he has become the hunted defendant and the predatory plaintiff has exposed his name to the domain industry world. This in itself is a significant punishment. Looking from the plaintiff perspective, in retrospect, both the plaintiff and defendant missed the $150K sale opportunity. Both are losers. Now they both have unnecessary legal expenses and the public exposure.
Whatever about this young guy’s ethics…
…He had a bit of bad luck, too…..If that reg fee domain hadn’t gone beserk, and sold – a month later – for $151,000 – he wouldn’t be in this spot now…
But, then….’Expect the Unexpected’.
He’s learned a lot of life’s lessons over this.
The underlying personal flaws in this transaction is greed and ethics.
The seller made a mistake. We don’t know if it was a momentary* lack of ethics blinded by greed or if that is his true ethical character.
( * moot point)
If the initial seller knew the domain was valuable, why did he lowball?
But, I don’t believe the domain is truly worth $ 150K. The final sale was an anomaly/outlier.
If the present owner put the domain up for auction on Namejet today, it probably would generate a $ 25K sale. $ 24K of the price because of its notoriety. $ 1K for its wholesale value.
I also agree with John B. regarding the initial buyer’s possible damages. If the seller had enough financial staying power to fight this case, it would eventually be abandoned ( and not financially settled).
With all of the MAJOR problems facing our industry, why are we wasting our time and mental energy arguing about a teenager that ran a red light.
He knows he made a mistake.
Lets move onto something we can solve.
And, to use an expression of RS – Next.
Another
The reason I wrote about it was not so much about the kid but the comments to the post on the forum (now taken down) that supported the kids actions and the argument that a bunch of e-mails don’t mean a thing and isn’t a contract.
Finally the jails are full of people that “made a mistake”.
MHB did a service to the domaining community posting this.
It is a valuable lesson to be learned regarding contract law. And apparently a lot still need to learn it.
The other lesson to be learned was provided by Mr. John Berryhill: Very rarely are things ever clearly black and white. Even when a case seems like a slam-dunk, it might not be upon further review…
Do the major – successful – business trained domainers really hang around and comment on DNF and NP like they did 7 yrs ago? I would say – NO.
We can not judge the ethical fiber and the legal knowledge of our industry based on the comments of a few (or more) forum members.
I would not want to paint with a wide brush since I did not read the initial thread on DNF. But, I would speculate the ones that thought the seller was correct in his actions do not represent the majority of domainers.
“Do the major – successful – business trained domainers really hang around and comment on DNF and NP like they did 7 yrs ago? I would say – NO.”
I would say this group of domainers is a very small minority…
Tony
I personally never hung out in the forums, 7 years ago or today
Another
I’m not judging “the ethical fiber and the legal knowledge of our industry”
When I see half of the comments on this post clearly showing that members of the domain community have no idea of the basic rules or laws of buying and selling domains, its worth writing about.
Couple that with the defaulting bidder at sedo for almost $200K in auctions and we have a problem
Once the domain was agreed to be given to Seller A then Seller A legally owns the domain, so any profit from that domain, be it ad profit, sales, etc, belong to Seller A. Since Seller A owned the domain when Seller B bought it from this guy, Seller A has right to all monetary and all other funds once he owns the domain.
Time to develop a web site that tracks, display and disgraces dead beat domain name bidders. Names, addresses, phone numbers – whatever you got. Hey, they entered into a contract – what part of that did they not understand? Too bad if they dont like it.
Want to get removed? Sure, pay for the domain immediately.
MHB, you’re comparing him to someone in confinement? I mean, I guess I can see how he’s comparable to someone who has committed robbery, rape, murder… Wait, didn’t he just commit to sell a domain name through email?
Where did I compare him to someone in jail?
It’s a valuable lesson in offer and accepatance. Maybe it would be worthwhile to have a basic contract review session at one of the conferences. There are very few “nuclear elements” of a contract. Price is certainly one. Parties to the contract are another. For example, if you make a deal with Bill Gates, it does not mean you have made a deal with Microsoft. Maybe Bill Gates was dealing personally, such as buying a mansion from you. Of course, if you broke that deal, then not only would you be surprised to be sued by Microsoft, but Microsoft wasn’t a party to any contract you may have formed with Bill Gates.
And, you might just want to reflect on that, given the various accounting of events we’ve seen in this instance.
Following up on Johnny Bee’s comment about the few “nuclear elements of a contract”, another important element is that a reasonable and equal transfer of compensatory “goods or services” are expected to be accomplished. You can’t have a contract where someone gets something for nothing (other than a “will”, but that isn’t a contract between the two parties directly).
Both parties, by reasonable and logical interpretation, must “perform” to balance out the equality of the contractual goal, and one side can’t expect to gain significantly higher ‘benefits’ from the contract than the other, especially through a later “undefined” interpretation that unfairly enriches on party – unless of course it’s an intangible. And there’s the rub.
I’m not an attorney, I just play one on TV.
“I’m not an attorney, I just play one on TV.”
And, I thought your full-time job was being a model for Play Girl Magazine.
🙂
“Once the domain was agreed to be given to Seller A then Seller A legally owns the domain”
Unlike, say, a car, where there is a separate title document evincing ownership, domain name registrations are odd, in that the registration itself is what passes for “title”.
In other words, it does not matter who is in possession of my car – if my name is on the title, then I own it. The notion that title passes here upon agreement to transfer, as opposed to actual transfer, is something upon which anyone who has ever been to, say, a real estate closing, might differ with that view.
In semi-related news, TechCrunch reported today that NBC is being sued for something similar
http://techcrunch.com/2010/06/04/nbc-done-lawsuit/
It appears they agreed via written contract to sell women.com and then backed out before the domain was transferred.
@another domainer
Dang — you rooted through my past and found out! I quit tho… they didn’t pay per “inch”, noting their lack of funds for paying such a “large fee” to me. 3-)
If a prospective buyer explicitly agrees to purchase a domain name for a specific price in an email and then several days later backs out of the deal (before money or domains have changed hands) – does the seller have any recourse?
MS
A seller could sue the prospective buyer.
Now the question is will they win and will the costs involved be worth it?
For a seller to have a good case it needs to get the buyer to identify themselves during the process as opposed as a bunch of e-mail’s from say a hotmail account.
Make sure you have an actual agreement.
I offer to sell you the domain xxxxx.com for $5,000 and the buyer says yes, or Ok or I agree, then you have the issue of how the transaction will be transacted.
Time frame, how will payment be made, how will the domain be transferred?
As long as there is agreement on these issue, you should have a decent shot at winning the case. Of course in absence of a written agreement between the parties, each party is responsible for their own attorney fees so if your suing someone for not buying a domain you agreed to sell for a few thousand dollars it most likely not going to be worth your costs.
In any case you need to consult with an attorney to get an opinion on your rights as each case if different and there is no general rule.
Awesome discussion. It really underlines the value of a lawyer in business transactions. Nothing… almost, is “certain” when good lawyers are involved.
I doubt any actual lawyer wants to go on record with actual statements about a pending case (because they have so little to gain and the act does assume some risk), but if you read the above, two of them have demonstrated there WOULD HAVE BEEN more than one way to handle this case’s claim. Of course the forums were consulted instead…
+1 for highlighting the comments in the original thread. If they don’t represent the domainer community, then that says something about DNForum.
According to the OP citing the original seller: ..”I began looking into Dynadot and I was confused on how to push the domain”…. “I told Person A I was a little unsure of things and instructed him not to pay me again unless the domain was first in his account. ***** I then decided and went through the transfer and sold the domain to Person B. He sent me $1200, I sent him camroulette.com.****”
So the self proclaimed ignorant seller figured out how the Dynadot or general domain transfers work in mear hours after receiving a larger sum of money. It says a lot about how fast you can learn things when the right motivation is there.
I followed this story since the original buyer’s remorse posting, and if you read all the early material and do a little research on the person, the original seller has some issues that aren’t being focused on anymore, since the story has now shifted to the greedy litigant and the dollars. Along the way some post information has disappeared.
This is not a naive 20 year old. He has past experience in domains and other things Internet. And how about the man in the middle? And what do these events say about pulling forum posts? Ahh, welcome to the world of domain investing.
Don’t people know, that once things hit the web, they never die, they just move into someone’s archive.
And there lies the real story in all of this: where does your social graph rest – for all to view at a later point in time?
so what is the plaintiff going to gain here? 150k minus fees and costs? vengeance on a kid? he’s not getting the domain. and that’s what he wanted.
if the kid/seller is reading this, take note:
relax. you are much smarter than the guy suing you in the areas that matter here: internet. (why did he want a silly domain? why would he be interested in the internet?) he’s not going to ruin your life. your life hasn’t even begun. the simple fact is you understand technology and he doesn’t. and you should see the vast potential in this- your life is just beginning. domain names are still, in all major respects, an issue of technology. good luck applying contract law, or property law, to the internet- we’ve been trying for decades. that’s not what *really* works and everyone in the business knows it. using lawyers or traditional business methods to secure domain names is not yet a viable strategy (that NBC case is a classic example). but intimidation will work on some people, e.g. kids. pretty sad if you asked me.
wild west. inconvenient but true.
DNW.com is reporting that the CamRoulette.com case has been settled, see:
http://domainnamewire.com/2010/08/30/lawsuit-against-original-camroulette-com-settled/
too bad buyers constantly back out or want to reduce their offer after agreeing to purchase a domain at a certain price. where are the legal protections for sellers?
There are no legal protections, all there is that you have the DOMAIN THEY WANT, and now you don’t negotiate for that lower price they might want. No game playing in this game… don’t be desperate for the sale unless you need the cash, but think hard, because that domain might be worth twice as much the next year…
I don’t know that a verbal agreement (or handshake) will stand up in court nowadays. Everything should be in writing.
Stephen gives great negotiating advice, but until it is in writing it doesn’t exist.
I’m not sure what Stephen means by the verbal agreement/handshake comment. The whole flow towards the sale has been documented by email. Email is arguably more watertight than a paper document, nowadays. Poor lad, though, we’ve all been young and stupid, but it doesn’t normally cause us this much grief!
That’s so f_____g messed up. I’m just appalled. Going to ruin a young kids life for 700 dollars? Are you kidding me ? Emails should NOT be considered a binding agreement, that’s absurd. Things need to change in this f_____g world
you know you can have an oral agreement as well
Indeed, you are screwed. The worst part? You ain’t got the guts to fight. Man up, weasel and fight back. It doesn’t have to be violent. Kill the cat anyway. Use your head!