A few weeks ago, I auctioned off a domain name on Sedo.com. It fetched a little over a thousand bucks so I was happy to sell. One day after the auction ended, I promptly received an email message from Sedo, which informed me that they had already invoiced the buyer and were expecting the payment for the domain to arrive soon. Since the entire process was dependent on when the buyer sent payment, Sedo didn’t specify a date when the transaction would be completed.
A couple of weeks passed and I didn’t hear any update from Sedo. Then I started thinking, “What happens if the buyer doesn’t pay?”. I’ve had encounters with time wasters on some of the domaining forums, but there are no formal or legally binding contracts for domain transactions on those forums, so there’s really not much that you can do. You get to scratch your head and mutter curses to an unresponsive screen — that’s the closest thing to compensation that you could get. But this was Sedo, possibly the biggest domain auction house on the Internet!
I decided to contact Sedo — surely a thousand bucks is worth more than one email message. I didn’t get any reply though. They usually reply within a day or two, but not this time. I checked the Sedo contract again, but it didn’t say anything about what happens if the buyer does not pay — whether Sedo will twist his arm and make him cough up the money that he promised to pay when he placed his bid. Nothing. The only clause that was remotely related was this:
Payment must be remmited (sic) to Sedo with five (5) business days from the creation of the payment request.
It didn’t say what happens if the buyer doesn’t pay within five business days. Maybe Sedo doesn’t want to think about that part.
Anyway, I needed confirmation if I was still legally bound to sell considering that the buyer had obviously defaulted on his payment. Since I wasn’t getting any reply from Sedo, I decided to contact a Sedo employee who lurks on one of the domaining forums that I frequent. I got a reply within an hour. He wrote:
The buyer has five days to confirm payment has been sent and then the seller can choose to cancel.
That was my way out of the contract. I wasn’t happy that my domain didn’t sell as I thought it did, but I was glad to have found closure on this issue. A few hours after I got the answer from the Sedo guy on the forum, I finally received an official reply from Sedo:
Unfortunately we have had no choice but to cancel the transfer for this domain name. Despite repeated emails and contact attempts the buyer has failed to make payment for this domain.
The contract in place for this transaction is legally binding. Should you wish to pursue legal action, the buyer's applicable contact details have been made available for your viewing. You will now find them on the contract for this transaction within your Sedo account.
I’d wasted enough time on this buyer, so I didn’t even think about whether I should pursue legal action. It was a lesson learned: A domain isn’t sold until you actually receive the payment, regardless of where you sell it.
One week after this all happened, I received an email message from a guy who made an offer on the same domain a few months back. He was asked if I had decided on the selling price for the domain. I said yes and asked for 150% of the winning bid on Sedo, plus Escrow.com fee. He agreed. So I was able to sell the domain for more and all is well.
Tags: domain auction, domain name, sedo, selling
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