(Hey, I understand... As a domainer I might be a little bit sorta guilty-ish of this myself. I own a few typos.)
1. Be honest with yourself. How many domains have you sold by regging names where a legitimate business existed? And how much were you wanting to get for the said domains? Now that the tables are turned, you state that "as an owner of an established business I don't think we should enter a "negotiation" as if he should rightfully own it in the first place.
2. If the name is NewYork generic, i.e., NewYorkContractors.com, NewYorkPainters.com, I think your chances of retaining the domain name via legal means is nil.
3. You say you are purchasing a business. Do you view domaining as a business? Aside from the physica assets of this business that you are purchasing, don't you think that the domain itself is a part of that business, and should be treated as such? If so, be prepared to enter into negotiations with the current owner in order to add this asset to your business. If you are not willing to do this, then you have no right to claim the name as part of your business imo






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