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Drafting a domain name sales contract involves recording the transfer of a domain name as the purchase of an intellectual property right (Article 7:47 of the Dutch Civil Code), including the obligation to cooperate with the transfer at the registrar. Because a domain name is not property but a registration with, for example, SIDN, the contract revolves around the registration in the name of the holder, guarantees against trademark and trade name conflicts, and linking payment to the actual transfer. The overview below shows which components should be included.
The short answer
- Parties and domain name: seller, buyer and the exact name with extension.
- Transfer and cooperation: the seller transfers and cooperates with the move.
- Price and payment date: preferably payment after registration is completed.
- Guarantees: the name does not infringe any trademark or trade name rights and there is no pending dispute.
- Indemnification: protection of the buyer against claims from third parties.
- Ancillary matters: email, renewal, any website content and DNS data.
Drafting a domain name sales contract: start with the registration
The heart of this contract is the transfer of rights to the domain name and the transfer at the registrar. Specify the name exactly, including the extension, and stipulate that the seller transfers the rights and cooperates with the change of ownership. For a .nl domain, this means cooperating with the transfer at SIDN, by providing a transfer token or the necessary details.
Separate the legal agreement from the technical execution. The contract regulates the obligation; the name only actually transfers once the registration is in the buyer's name. Set a time limit within which the seller initiates the relocation.
Price and payment date
State the price and the VAT treatment. The most sensitive point is the payment timing. With a domain name, as a buyer, you do not want to pay in advance for a name that has not yet been transferred. Therefore, link the payment to the completed registration, or use a third-party escrow solution or escrow for larger amounts. This way, the buyer only pays when they actually keep the name, and the seller has the assurance that the money is ready.
Recording warranties and indemnities
The greatest legal risk associated with a domain name is a conflict with a trademark or trade name. Therefore, include guarantees that the seller is the authorized holder, that the name does not infringe any third-party trademark or trade name rights, and that there is no ongoing or announced dispute, for example through the dispute resolution procedure for .nl domains. These guarantees provide the buyer with a claim if it turns out afterwards that an issue is indeed at play.
Supplement the warranties with an indemnity. If the buyer receives a claim from a trademark or trade name holder after the transfer, the seller bears the consequences thereof. In the case of sensitive trademarks, this is the most important part of the contract, because a lost dispute costs the buyer the name.
Side issues that are often forgotten
There are often ancillary matters surrounding a domain name. Specify what happens to the email addresses associated with the name, ongoing renewal costs, and any DNS settings or linked services. If the name belongs to an existing website, determine whether the website content will be transferred or not; this is a separate agreement, as the content may be protected by copyright.
Also regulate the period surrounding the move. Who bears the renewal costs if the registration expires during the process, and how do you prevent the name from accidentally becoming available? A brief provision regarding this prevents a valuable name from being lost due to a missed renewal.
An example. A web agency purchases a generic, highly sought-after domain name for €8,000 to launch a new service on it. The contract specifies the exact name, the obligation to transfer it to SIDN within ten working days, payment via escrow that is only released after registration, guarantees that the name does not infringe trademark rights and is free from dispute, an indemnity, and the agreement that the seller covers the renewal costs until the transfer.
Honest recommendation
You do not need a lawyer for an inexpensive, non-brand-sensitive name from a reliable party. A brief agreement regarding the transfer obligation and payment after the transfer suffices. The registrar handles the technical side, and the financial stake is limited.
Be sure to have the contract drafted or reviewed in the case of a valuable or brand-sensitive name, an unknown or foreign seller, or when the name is part of a larger acquisition. In such cases, the guarantees against trademark and trade name conflicts, the indemnification, and the linking of payment to the registration carry significant weight. For a name containing a trademark, covering a potential claim is the most important aspect of arranging this contract.
Want to read more? View the domain name sales contract, first read what a domain name sales contract is and see what it costs to have a domain name sales contract drawn up.
Frequently Asked Questions
At a minimum: the parties, the exact domain name with extension, the transfer and the obligation to cooperate with the transfer at the registrar, the price with payment date, guarantees against trademark and trade name conflicts, and an indemnity. Additionally, you arrange email, renewal, and DNS.
As the purchase of an intangible property right (Article 7:47 of the Dutch Civil Code) with the obligation to cooperate in the relocation. Specify the exact name, set a period within which the seller commences the relocation, and stipulate that the name is effectively transferred as soon as the registration is recorded in the buyer's name at the registrar.
Preferably only after the transfer of ownership has been completed. Link the payment to the completed transfer or use escrow for larger amounts. This way, the buyer does not pay in advance for a name that has not yet been transferred, and the seller has certainty regarding the payment.
That the seller is the authorized holder, that the name does not infringe any third-party trademark or trade name rights, and that no dispute is pending or has been announced. These guarantees cover the greatest risk associated with domain names: a claim by a rights holder seeking to assert ownership of the name.
Because a warranty in itself does not always provide sufficient coverage. With an indemnification, the seller bears the consequences if the buyer receives a claim from a trademark or trade name holder after the transfer. For trademark-sensitive names, this is the most important part of the contract.
Not automatically. The domain name and the content of any website are separate matters; the content may be protected by copyright. If the buyer also wants the content, record this separately. For a complete site, a website sales contract is often more appropriate.
Specify who bears the renewal costs until the transfer and how you prevent the name from becoming available during the process. A brief provision regarding this prevents a valuable name from being lost due to a missed renewal just before the move is finalized.
