indemnity

[James]

Never had this one before..
I'm negotiating a sale of a domain name only...what exactly are they looking for :huh:

Will you provide indemnity for past use if I do buy it from you?

jim

[jberryhill]

Another way of phrasing the question is "Will you assume responsibility for whatever you did with the domain name?"

Let's say that I had cheer.com, and I was using it to sell laundry detergent in competition with CHEER brand detergent. Along comes someone who wants to buy it for use in connection with cheerleading. It would only be reasonable for me to indemnify him against any liability I had accrued while I had been engaging in trademark infringement, in the event that, five months from now, the detergent people sue him in the belief that he was the guy who was selling the detergent.

[Dale Hubbard]

Also; so loosely-phrased, it looks like they are asking for indeminity for any problems prior to his ownership also John? I wouldn't agree to that unless it was specific about any matter concerning MY past ownership of the domain...

[Acro]

I would turn down this "offer" unless they paid a hefty amount and the wording was VERY SPECIFIC as to what the "prior use" entailed. Usually small businesses that are used to being sued for this and that place such requests.

[jberryhill]

Also; so loosely-phrased, it looks like they are asking for indeminity for any problems prior to his ownership also John?

Emphasis on "so loosely-phrased". Obviously what matters is what ends up in black and white. It is generally an unobjectionable and perfectly reasonable proposition. Concerning "small businesses that are used to being sued", any successful business can expect to be sued. Legal disputes happen, and legal costs, insurance, etc. are just another item on the balance sheet along with garbage collection and utilities. Generally speaking, large publically-held companies have a tremendous responsibility to their shareholders to take all reasonable measures to limit potential liability. That's what insurance is for, and that's what indemnification clauses are for. Of course, any indemnification clause is only worth the indemnor's ability to back it up, which normally translates into "good luck enforcing that". If an indemnee is sued, they are still primarily liable for any judgment, and have to bring a separate action against their indemnor.

But, again, they don't know if you've used the domain name for spam, fraud, phishing, or any of a whole world of bad things, or what baggage they might have to carry as a consequence of that. If you are comfortable with whatever you've done with the domain - which you should be - then a statement to the effect that you would assume future liability arising from your own actions should not be an onerous obligation.

[Acro]

Thanks for the detailed info, John. I sold only one domain where the buyer requested such info. In the contract, the clause used explicitly specified the period of my ownership as the timespan that the idemnification covered. Since the domain was owned by someonw else before me, I wanted to make sure that any use prior to my ownership was excluded from the agreement.