Legal Ramifications of Breaking a Deal |

Legal Ramifications of Breaking a Deal


On Thursday, I discussed the business ramifications of backing out of a domain deal, and how doing so can potentially cause major damage to a person’s reputation. Both publicly and privately, I’ve heard from a few people about this type of issue, and it really seems to be a big problem in the industry. For whatever reason, some people believe that just because an official contract created by attorney was not signed by both parties, the agreement is not legally binding.

Yesterday, my friend Mike Berkens discussed the legal aspect of a buyer reneging on a deal. There are many variables that come into play with a situation like this, so it isn’t always cut and dry.

While most domain transactions probably wouldn’t be worth the expense and hassle of filing a lawsuit if an agreement was breeched, it might merit a call to an attorney to explore the options. In all cases, the buyer should take some time to decide whether its really worth fighting, as legal action isn’t usual a simple process. A business case/cost benefit analysis should be made to determine whether the outcome would benefit the business based on the potential costs.

Whatever the case may be, I think everyone can agree that backing out of an agreement is in poor form.

About The Author: Elliot Silver is an Internet entrepreneur and publisher of Elliot is also the founder and President of Top Notch Domains, LLC, a company that has sold seven figures worth of domain names in the last five years. Please read the Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest.

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Comments (2)


    Aside from the ethical issue of backing out of a deal – and I do think that’s an important consideration – there’s the fact that the domain name industry is a lot like a small town where everyone knows everyone, or at the most is two steps removed. If you develop a reputation for shady behavior, it will make it very difficult to function in this industry.

    December 31st, 2007 at 1:26 pm


    Sorry, I posted my comment and then I scrolled down the page and saw your earlier post in which you already made that point.

    December 31st, 2007 at 2:10 pm

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