Category Archives: Legal

How to sell a domain name

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A domain name is the unique address of a website or email server. It consists of the words following www. in a website URL, or after the @ in an email address – for example: example.co.uk. This domain name will direct users to a site and emails to a server, in the same way that a telephone number directs the caller to a particular phone.

Certain domain names carry more status, are easier to remember, and are consequently more valuable than others. Domain name sales can be a lucrative business if you know how to play the game.

So how do you sell a domain name? Here are some tips to embarking into the world of domain names.

1. How to choose the right domain name

Acquiring the right domain name can have a big impact for a business, which is why they may be willing to pay a lot of money to get the right one. Typically businesses will try and choose a name that is related to the name of their company or product. Keeping a domain name simple means customers will be able to easily identify a website, or guess the name when they are searching for it.

If you are looking for domain names that will have good resale value, try to focus on a particular industry that you are familiar with. Consider what names could be valuable for people within this industry. Using keywords in a domain name is known to have some value in improving a domain name’s search engine optimisation.

2. Understanding extensions

Each domain name ends with an extension – for example .co.uk or .org – that indicates the region the name is registered in or the type of organisation it is used by.

Some extensions carry certain restrictions. For example, the extension .eu is limited to companies registered in the EU. So following the end of the Brexit transition period, UK companies or individuals will no longer be able to register or renew a .eu domain name.

As well as researching which extensions will be available to you, think about your target customer and what extension will be attractive to them, as these will be the domain names that offer greater value.

3. Registering a domain name

It is not possible to buy a domain name outright. Instead, domain names must be registered. Registering gives the buyer the right to use the domain name for an agreed period and the registration will need to be renewed periodically.

Most .uk domain extensions are managed by Nominet, and all .co.uk domain names need to be registered with them. However, there are various companies who can register a different domain name for you.

4. Increase the value of your domain name

You are able to keep hold of a domain name for 10 years. Older, more established sites are going to be more attractive if they already receive a lot of traffic. So rather than leaving these domains sitting on the shelf, why not use this time to monetise them, applying SEO strategy to increase their value, and allow you to justify a higher sale price. You could further your investment by creating a fully functioning website that you could sell rather than just a domain name.

How to find buyers for your domain name

Once you are ready to look for buyers, there are various ways to go about it.

Auction sites like EBay, or Sedo are a good place to start.  Also get your name listed in domain selling networks. This will get the name in front of thousands potential buyers who already trust the network.

Don’t forget to make potential buyers aware that your domain name is for sale with a clear indication on your site. You could create a landing page to direct them to.

Avoiding potential disputes

Legal disputes over domain names are common. This is because registrations can be challenged by third parties if they can claim the domain name is misusing their trademark. It might be that the trademark is included in the domain name, or closely replicated.

If a company can evidence loss of income from your use of their trademark, by misleading the public or benefiting from their brand to direct traffic to an alternative site, they have a legal claim on that domain name. So be careful to avoid potentially disputed domain names, as they could lead to more trouble than they are worth.

How to sell a domain name

Before selling a domain name, you will need to make sure you:

  • have a legal right to sell it;
  • are able to transfer the domain name upon sale;
  • are not at risk of trademark disputes.

Your Domain Name Sale Agreement must certify your right to sell the domain name and include warrantees on the domain name being available for sale, without any pre-conditions attached.

At the point of sale, you will need to register the change of ownership with the appropriate internet domain name registry. You can then submit an authorisation code to begin the transfer process.

If you are looking to sell the whole website, as well as just the domain name, this is a more complicated transaction. There are various other factors including several IP rights to consider. Therefore, you will want a more thorough sales agreement to cover all these elements.

The Legal Stop provides fixed fee legal services and legal and business document templates for individuals and businesses, our mission is to make legal services accessible and transparent to individuals and businesses alike. 

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What makes a promissory note valid?

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When an individual or corporation lends someone a sum of money, a promissory note can be used, effectively like an IOU, to document the terms of the loan. Promissory notes are used for anything from informal loans between friends to much larger business loans.

Even among friends, when significant sums of money are involved, it is wise to have a formal agreement. Circumstances sometimes change, meaning the repayment of the loan may not happen in the way the lender (or borrower) expects.

In these moments having a valid promissory note is essential if the lender wishes to take legal action to reclaim their money. However, in order to enforce it, you will need to be certain that your promissory note is valid.

What is a promissory note?

A promissory note is a legally binding document between a lender and borrower agreeing the terms of repayment of a loan. Although the complexity will vary depending on the type of loan, typically a promissory note is a fairly straightforward document which is less extensive than a Loan Agreement. For loans that are less secure, perhaps to an unknown party, a Loan Agreement provides more comprehensive terms, so may be preferable for added security.

A promissory note will usually include:

  • The names of the lender and borrower
  • The borrower’s address
  • The amount to be borrowed
  • The date that the note is issued
  • The term of the loan period
  • Whether the amount due is payable on demand
  • Details around any interest and interest rates
  • Details about any collateral

How the loan is repaid can vary. The borrower may pay in regular instalments throughout the loan period, or pay it all as a lump sum at the end. It is common for the borrower to pay interest on the amount they borrow, although not always. The interest rate is agreed upon between the lender and borrower, and would generally be higher if there is no collateral provided.

Does it need to be in writing?

Since a promissory note is an agreement between two parties, it does not necessarily have to be in writing. A verbal agreement is still seen as binding. However, it will be extremely difficult to enforce the terms of the agreement in court unless they are in written form. Therefore, as a lender, if there is any uncertainty around the repayment of the loan, it is advisable to draw up a promissory note in writing.

Who needs to sign?

The signature of the borrower is obligatory in order to make the written promissory note valid. Whether or not the lender also signs will depend on the level of trust involved and the type of loan. However, without the borrower’s signature the document would be unenforceable.

Why might a promissory note be considered invalid?

For a promissory note to be enforceable, the terms and conditions should generally be fair and balanced between the two parties. If the terms are seen to weigh heavily in favour of one party, or if there is evidence that the borrower signed any of the terms under duress, there is a greater likelihood that they will not be enforced by the court.

Is it governed by the Consumer Credit Act?

If your promissory note is over £30.00 and is considered a commercial agreement – for example from a lender who regularly gives out loans as part of their daily business – the note will normally be governed by the Consumer Credit Act. Under this Act, your promissory note will need to comply with certain regulations in order to be valid, such as providing an annual percentage rate (APR) for interest. 

How do you enforce a promissory note?

Promissory notes can be either secured or unsecured, and this will decide how the note can be enforced in the event of non-repayment.

If the borrower is required to provide collateral for the loan, this can be seized and sold by the lender to claim back all or part of the debt. If the collateral does not cover the full amount of the note, or if the promissory note is unsecured, it is more complex for the lender to reclaim the outstanding amount. Initially they can try to negotiate directly with the borrower, or instruct a debt collection agency. Ultimately though, they may need to take the borrower to court to enforce the terms of their agreement.

The Legal Stop provides fixed fee legal services and legal and business document templates for individuals and businesses, our mission is to make legal services accessible and transparent to individuals and businesses alike. 

Our services include: