Drafting a domain name purchase agreement: this is what belongs in it

Drafting a domain name purchase agreement involves centering on the transfer of ownership, because a domain name is not an asset you possess but a registration with the registrar. The contract must therefore regulate how the transfer proceeds, when payment takes place, confirm that the seller is the holder, and ensure that the name does not infringe on trademark or trade name rights. Below are the components that belong in the contract and the choices you make along the way.

The short answer

1. Identify the domain name: exact name, extension, and current registrar.
2. Arrange the transfer: relocation token or change of ownership, with obligation to cooperate.
3. Link the paymentto the completion of the move, possibly via escrow.
4. Include guarantees: possession, no attachment or pledge, no infringement.
5. Add an indemnity: against trademark and trade name claims from third parties.

Drafting a domain name purchase agreement starts with the transfer

Because a domain name is not property but a claim against the registrar, the contract revolves around the transfer of ownership. Describe the domain name exactly, with the correct extension and the current registrar, and specify how the transfer takes place. For .nl, this is handled via SIDN using a transfer token; separate procedures apply to other extensions. Include a duty of cooperation: the seller does everything necessary until the registration is in the buyer's name.

Also determine what happens to associated matters. Consider email addresses on the domain, DNS settings, and any ongoing hosting. Specify whether these will be transferred or if the buyer will arrange new hosting themselves, so that no service fails after the transfer.

Payment and escrow

The order of payment and transfer is the most sensitive point. Because the move goes through the registrar, you must spread the risk:

• Payment upon completion: the buyer only pays when the domain name is registered in their name.
• Escrow: an independent party holds the money until the move is completed.
• Partial payment: a down payment and the remainder upon completion, for valuable names.
• Deadline: a final date by which the move must be completed.

For a valuable domain name, escrow is the safest route. The buyer knows for certain that they will only pay once they have the name, and the seller knows that the money is already ready. For small amounts, payment upon completion is sufficient.

Warranties and ownership

The core of the guarantees is that the seller is the rightful holder and is entitled to transfer the domain name. Additionally, include that there is no lien, attachment, or dispute on the name and that the registration is not due to expire soon. For domain names linked to an ongoing business, it is advisable to guarantee that there are no ongoing disputes or complaints regarding the name.

Also stipulate what happens if a warranty is incorrect. Link a liability clause to it so that the seller bears the damages if, for example, it turns out that he was not the holder or that the name was under attachment.

Trademark law and indemnification

A domain name may conflict with a registered trademark or an existing trade name. If a rights holder makes a claim, the buyer cannot use the name undisturbed. Therefore, include a guarantee that the domain name does not infringe on the rights of third parties, and an indemnity in the event that someone does file a claim. The seller will then bear the costs and damages of such a conflict.

Practical example. An entrepreneur purchases a domain name similar to a well-known brand name in another industry. The agreement contains a guarantee that the seller is the holder, an indemnity against trademark claims, and an escrow arrangement. When the trademark holder later objected, the seller paid the legal costs based on the indemnity. Without that provision, the buyer would have had to foot the bill themselves.

Honest recommendation

For an inexpensive domain name without trademark sensitivity, purchased from a reliable party, you can draft a short agreement yourself. A written confirmation with the exact name, a guarantee regarding ownership, and payment upon completion of the transfer usually suffice. In those simple cases, you do not need a lawyer.

As soon as it involves a valuable name, a name resembling a brand, or an unknown seller, the contract becomes too important for a standard template. The warranties, indemnification, and escrow arrangements require customization. In such cases, have the contract drafted or reviewed by a legal expert.

Read more or have the contract drawn up? View the domain name purchase agreement, first read what a domain name purchase agreement is and compare what it costs to have a domain name purchase agreement drafted .

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