Can I back out of an agreement based on false information ?

[creature]

I agreed by email to sell a wonderful generic .us after the buyer said that he needed it to start his own company in Brazil and pleaded poverty.

After searching the email address it seems that he is in fact part of a much larger national company by the same name. All of the .ca .it ext have also been bought by his company.

Can I legally back out of a sale given that I decided to sell and I based the price on false information. Or should I just cash in the name? We are talking about 2.5k

Creature.

 

[DNQuest.com]

You agreed to a price, you have it in writting (yes, email correspondance can be used as an agreement), a deal is a deal.

Buyers and sellers alike both lie when negotiating, it is part of the game. I have inquiries all the time stating how poor they are when buying a domain. It all depends on the name if I budge or not. Do I believe these people??? heck no. But a sale is a sale. Sometimes, I know better, but just want to move the domain. There have been times where I rejected offers, but then end up selling it at a lower price later down the road.

 

[armstrong]

I agreed by email to sell a wonderful generic .us after the buyer said that he needed it to start his own company in Brazil and pleaded poverty.

Why would a poor man spend $2.5k on a .us domain for a Brazilan company, considering .us nexus requirements? Why not just register a new dotcom or a com.br, which may be more appropriate for Brazil?

Ethically, you should honor this deal; being unable to spot his white lies is your shortcoming, after all. But legally? There's a chance you can get away with it, specially if the other party used a false identity. I mean, say you made this deal with Joe Diaz, a poor man from Brazil; if he is really John Rockefeller of Chicago, then you might be able to argue that you made no deal with John. Then again this might depend on the laws of where you are. Ask a lawyer.

 

[primacomputer]

I don't see any reason you can't back out of the deal, legally, ethically or otherwise. A deal is not a deal when someone has been deceptive.

For example, lets say I sell you a piece of software. I give you a special price because you say you're going to use it in a school. You then use it a business and say “haha a deal is a deal”. You won't be laughing so much when the software police show up at your office. A nice real world example of how a deal is NOT a deal when someone lies.

Yes, your deal is all in writing. So his deception. Hmm. What do you call it when someone obtains goods or services by deception?

Without knowing all the details I can't tell you what to do, but from what you have said I would have no problem simply going back to them saying you have decided to not sell at that price. You may want to explain that you've done some research and found that the name is worth far more. You may want to mention that you know they lied. You may not.

Of course you also need to decide whether you think you can get more for the name. Just because they lied about why their budget was low doesn't necessarily mean it is really any higher.

It's certainly a good lesson in why you should thoroughly research a buyer before answering their first enquiry, and hopefully you won't make the same mistake again. But forget all this pseudo moral “deal is a deal” stuff.

Then again. Maybe he has his fingers crossed when he was lying to you so it doesn't count

 

[armstrong]

I need to clarify my statement above.

Like many, I believe that negotiation is a kind of mental battle, one in which information is a key weapon. Part of the game is trying to gain as much info as possible about your opponent, while limiting his access to info about you. In the course of negotiation, small white lies are usually anticipated by both parties, such as having to "consult with a partner" (to buy time and to disclaim authority). To simply assume that the other side will tell the truth, the entire truth, etc. as if he were under oath ... is simply unrealistic.

However, I do not condone blatant lying to get a good deal. I'm a believer in karma - what goes around comes around. One cannot lie about material info (like type-in traffic, or who one works for), and expect to just laugh it off when caught.

In this the OP's particular example, you have to examine your negotiation with him. Did he actually blatantly lied to you, or did he merely withhold key information? There is a difference, which in this case might be worth several thousand dollars.

 

[DNQuest.com]

There is where I differ, a lie is a lie whether it is small or big. In negotiations, we both lie, so I can't be too hypocritical is saying the seller blatently lied to me. I had a domain which became nationally marketed for a specific product. (I first it on the radio driving home from a trip, it really freaked me out). Turns out the buyer wasn't such a small guy after all, then again, I claimed I purchased the domain for more than I actually did. We both equally lied.

Sellers lie all the time... "let me talk to my partner", "I have other offers on the domain", "I purchased the domain at $$$" (when in fact we only paid a reg fee or maybe a smal drop price), etc..... Just because a seller became a sucker in believing a buyer, a deal is still a deal. It's called moral and honor.

How many out there lied when trying to purchase a domain?? I gaurentee every one of us had and anyone who says they have never lied during negotiations I will call out as a liar. Like I said, a lie is a lie, whether it's big or small, it is still a lie.

Can I have a hallelujah....

EDIT TO ADD: if there is a special condition to which you sold the domain or special circumstance for a discount, write up a contract and include language which involves the circumstnace, include a timeline and a penalty clause. (IE- for a non profit purchased the domain, you gave them a break. State if used for commercial use in a year, they have to pay a penalty unless agreed to in writing).

 

[spaggle]

Just because a seller became a sucker in believing a buyer, a deal is still a deal. It's called moral and honor.

What?? I can't believe my eyes. [[Crosses DNQuest.com off the list of people to do business with]]

 

[Domainate.com]

I agreed by email to sell a wonderful generic .us after the buyer said that he needed it to start his own company in Brazil and pleaded poverty.

After searching the email address...*snip*

First off, I won't address the irony that a "poor Brazilian businessman" is buying a .us name from you which, according to the .us rules and regulations, is supposed to only go to someone with a residence or business presence in the US. Oops, too late. You should have told him to get a .com.br, the ccTLD for Brazil, as his generic term was probably available in it. That part of this equation just doesn't make sense.

Anyways, I don't see how you made this post and didn't see the other irony in it. You searched his email address...AFTER the sale? Why not BEFORE the sale? Granted, it doesn't matter whether or not you were able to find him to not be what he claimed, as a sale is a sale no matter who it's to. That's like selling something at a garage sale, watching the buyer pull out a wad of hundreds from their wallet, then saying "waaaait just a minute there buddy...the price just went up." Couldn't happen in real life - can't happen online.

 

[Damion]

@Creature:

If you do not wish to sell at 2.5K and you think the "buyer" would still be interested even raising the price on him/her then i would say go for it.

Email him/her back and say you have made an error in your estimation and you where not expereinced enough to place a value on it.
You have consulted a partner with years of experience in the domaining industry and you have to raise your price with a certain percentage.

It's your right to place your own price on the domain and it's your right to cancell the sale in the proceedings of this sale how it took place.

No contracts or whatso ever.
Just your wriiten word in a email stating you are prepared to sell for 2.5k...

This is not sufficient enough to win a legal dispute. You can back out any time if you do not wish to sell unless you have commited to a contract by agreeing to certain terms and conditions.

And even in real life this can be aplicable,

Using Crooky's example...

-Imagine a young car sales man being asked how much a certain car costs.

-He answers 2.5K

-Customer agrees to buy and pulls out a wad of cash, a lot more then 2.5K

-Young car sales man tells the buyer please hold and wait here for a minute and i will return with some paperwork.

-In the meantime he tells his employer about the buyer and his wad of cash.

-The employer instructs the young sales man to tell the buyer to come to his office.

-The employer tells the buyer due to the lack of experience and the young sales man being misinformed about the details of the car and the expected sales price he has to mark up the sales price with a x amount percentage.

-Ending up the buyer A still buying the car or B being dissapointed and moving on.

Can this be done in real life? Yes it can but obviously you can't mention this directly to the buyer in the sense of "I did not know you had so much money, so now you have to pay more!" Of course this is absurd but with a twist like above it is applicable.

But is it acceptable? I think the majority would say "Thanks but no thanks" and will move on to find another car of the same type from another sales man since he/she feels like being scammed or just (if the thought of being scammed doesn't cross their mind) thinks the price is too high.

Now a domain is unique regarding keywords and extension so this is a advantage unless the buyer thinks he has viable alternatives.

This could be your pitfall! If the buyer really wants it and you think the buyer can afford it easily then you could mark up the price. Just don't over do it!

Regarding the USA residence requirements is also something you should think about!
Maybe they don't have a USA business presence or person working for their organization.
And it would mean if they would find out they would drop it from their side.

Remember a email is not a contract. At least from the point of view in my own country this is not something i should worry about.
I don't think a email with an agreement to sell something is regarded as a legal obligation.

I would find that hard to believe actually.

So ask yourself the following questions:

Is there a chance another buyer will come along paying the same exact price or even more in a time period you find acceptable?
Is your answer No?
Then Sell it!!

Is your answer Yes?
Then take the chance! And mark up your price and restart negotiations.
Just don't start asking $xx.xxx figures!

But to answer your innitial question (And this my own personal opinion)...you can withdraw your sale and say there has been a miscommunication with your partner(s).
Of course at your own risk of losing the sale entirely.

People don't like to be dissapointed.

Because of this i would say sell it and experience this matter as a lesson learned. They made a mistake but you did not act upon it...your mistake.
If you act upon it now...you risk loosing the sale.

It's a calculated decision that only you can fully calculate regarding the domain and company in question.

Good luck with your proceedings.

 

[fonzie_007]

I somewhat disagree with what others have posted above. People are correct that there is a bit of (what some people consider) lying that goes on in negotiations. However, the central issue here is if you detrimentally relied on the statement that then induced you to sell the domain AND if you had known the truth, you would not have sold the domain.

Based on what you have said, it appears you made a deal and then did more research on the prospective buyer. Once you found out he/she/they had deeper pockets than you first anticipated, you want to rescind the deal and up the ante. The trouble with what you are wanting to do is twofold:
First, before making a deal, it is your responsibility to do all the due diligence (e.g. research). Second, as part of the deal, it was your responsibility to draft a contract to protect your interests (that including all material elements of the deal). In your case, you failed to do either.

Your situation is a good lesson to us all that we need to be more careful with the research we do BEFORE making a deal AND that contracts should be made with the sale of domains.

In the end, I still think you have to live with the deal you made. The opposing party may be ethically challenged (if what you say is true and depending on your viewpoint). Pleading to be poorer than what you are, is a legitimate tactic in negotiations. Lying and saying you a particular entity (e.g. a charity) when you are not, may provide grounds to rescind an agreement. Unfortunately, in your case, the former only appears to be true.

Live and learn.

BTW, $2.5k isn't a bad sale.

 

[labrocca]

Legally you should sell. Morally...do what you feel is right. Doubtful this guy will use any laws against you to force the sale at $2500 but you gotta consider that you did make the deal. If this guy passes will you be able to still sell this domain for $2500 easily? If not then just sell and be done with it.

I don't see any reason you can't back out of the deal, legally, ethically or otherwise. A deal is not a deal when someone has been deceptive.

For example, lets say I sell you a piece of software. I give you a special price because you say you're going to use it in a school. You then use it a business and say “haha a deal is a deal”. You won't be laughing so much when the software police show up at your office. A nice real world example of how a deal is NOT a deal when someone lies.

Sorry but that's not correct. If you are referring to educational licensed software...it's a LICENSE...which means you agreed to use it for certain circumstances. You are violating the license when you use it for non-educational purposes. There are no laws violated if I as a customer go into a store and haggle the price down using 150 lies (my mom is sick, my dog ate my old one...blah blah). However salesman can't lie about their products or what they do.

As for that scenario with the car sale...the buyer can easily take the seller to court to force the sale at agreed upon price. Each state has varying laws though. Take Nevada for example...the contract law here for construction contractors states that no deal is binding unless in writting from the OWNER. This happened to me where a pool salesman gave me a great quote...we agreed..I signed the paperwork, I even gave a deposit check that they cashed. However a month later...the owner nixed the deal saying it was too cheap. In Nevada I had no legal recourse.

Jurisdiction is a problem in this case for the Brazilian.

I do agree with one poster saying it can't hurt to see if you can UP the ante a bit..maybe another $1k on top?

 

[DN Tycoon]

You have already agreed to sell the domain name for the said price of 2.5K and you need to honor that contract. If the buyer lied about his status to gain hand in the deal and you failed to research before you agreed to the final sale price than there is nothing you can do. You should always do your research before you settle on a price for sale, the fact that he lied does not give you any right to pull the sale or ask for more since he did not break any agreement. If you said a factor in buying the domain name was he had to be 18 or older and you found out he was only 17 then yes you have every right to pull the deal off the table.

You did not figure this into your agreement and therefore you will be in the wrong if you pull out of the deal or try to gain more from the deal after the deal was made.

Do the right thing.

 

[Damion]

Legally you should sell. Morally...do what you feel is right. Doubtful this guy will use any laws against you to force the sale at $2500 but you gotta consider that you did make the deal.

Question Labrocca?

So the OP is in a legal position that he is obligated to sell because he agreed to sell in a email?

Not trying to dispute this but just asking?
For me in writing would mean a legally qualified contract and not just some correspondence.

An invoice or legal contract that complies to the legal qualifiactions it must meet to be a legal document is a type of writing that would be something that can be presented as binding.

But can just any correspondence qualify as binding? Let's say if i would write on a piece of notepad paper or yellow post it paper i agree to sell a domain for 2.5K then it would mean i would have to legally sell it to you?

And i can not pull out legally? Would you actually have a valid case in court?

Like said before i am not fully disputing this but i find this very VERY hard to believe.

It is a very interesting topic actually.

 

[deu12000]

A verbal contract is a legally binding contract (as long as you can prove it was made). A written contract even if it's on the back of a napkin is actual physical evidence of a contract being made and is much easier to prove, the same goes with emails (unless there are some falsification issues). Contracts are the easiest thing to get into, but there has to be reasonable proof that the contract was made for a court to validate a contract.

 

[Damion]

but there has to be reasonable proof that the contract was made for a court to validate a contract.

I think this is the issue at hand and therefor not anything in writing is binding...specially the back of a napkin.
Something in writing can in my opinion (hence my opinion) only be legally binding if such an agreement is validated by a notary or court. And even then the form of the contract needs to be constructed in the proper form.

If i would write on the back of a napkin or post it paper or A4 piece of paper i would sell a domain to you for a x amount and signed it then it still would not be binding in my opinion.

If i'm wrong i would very much like to be proven wrong with actual proof.

Emails the same: If you would ask me to sell a domain for a x amount and i would say "Yes, sure that sounds good, i agree" then it's still not binding since the agreement is not properly structured and validated to be recognized by a court.

I apologize for my stubbornness but unless someone can show me undeniable proof i just can't believe above examples can be binding.
Also a verbal agreement i find hard to beleive to be binding even if it can be proven it happend.

 

[deu12000]

Here's a link to a very simplified explanation of a contract. Of course contracts can vary by state and different outcomes can happen in any court situation.

http://www.nolo.com/definition.cfm/term/5477BBD7-40E0-492E-9A623482AE9D47FC

A legally binding agreement involving two or more people or businesses (called parties) that sets forth what the parties will or will not do. Most contracts that can be carried out within one year can be either oral or written.

For example, if I offer to sell you ten roses for $5 to be delivered next Thursday and you say "It's a deal," we've made a valid contract.

Here is some more contract information http://en.wikipedia.org/wiki/Contract pay special attention to the section that says Written Contracts.

Contrary to common wisdom, an informal exchange of promises can still be binding and legally as valid as a written contract.

 

[DN Tycoon]

If i would write on the back of a napkin or post it paper or A4 piece of paper i would sell a domain to you for a x amount and signed it then it still would not be binding in my opinion.

If i'm wrong i would very much like to be proven wrong with actual proof.

http://www.lasher.com/news_detail.asp?id=77

http://boston.bizjournals.com/boston/stories/2003/06/16/focus11.html

 

[deu12000]

The lasher.com link is very good. It even answers his question with the best example:

...it can be hand-written on a cocktail napkin in everyday language.

 

[armstrong]

This is an interesting thread, indeed, specially in the context of DNOA. Now is the time to nail down ethical issues like these.

Here's a similar question: assume the same deception (buyer misrepresented who he works for), would it matter when the deception is discovered?
a. during negotiations
b. after a price is agreed on
c. after money is sent
d. after money is received (in case of check, when it is deposited to seller's account)
e. after the item is sent
f. after the item is received

What if it were a more serious deception, like outright lying about who you are?

 

[DN Tycoon]

This is an interesting thread, indeed, specially in the context of DNOA. Now is the time to nail down ethical issues like these.

Here's a similar question: assume the same deception (buyer misrepresented who he works for), would it matter when the deception is discovered?
a. during negotiations
b. after a price is agreed on
c. after money is sent
d. after money is received (in case of check, when it is deposited to seller's account)
e. after the item is sent
f. after the item is received

What if it were a more serious deception, like outright lying about who you are?

IMHO A is the only logical and honest answer, you are making a deal based on money and value not personal status and personal values. The question is why does it matter if he lied or not, how exactly does that help/harm the deal.