The Domain Sales Contract in Spain

The domain sale has become an increasingly attractive investment, since it allows companies to have an active and effective presence on the Internet. Making the digital domain available, which is linked to a company’s image, products and services, is undoubtedly a key competitive advantage, in terms of accessibility to potential online buyers.

By means of the digital domain sales contract, a company or individual transfers an internet domain for a determined price. A series of guarantees is also offered, which grants the buyer full ownership of the domain.

In order to achieve the sale, it is essential to rely on the support of the named domain registrar. The domain registrar is the company which administers the digital domain in the name of its owner and carries out the orders received from the respective contracting parties.

Principal obligations of the domain sales contract

  • The first non-contractual obligation is based on the proper diligence of the buyer to find out who is the current owner of the domain name. To this effect, it is necessary that the owner (or seller) has deactivated the WHOIS privacy (public domains directory)
  • The seller must request that the domain registrar releases thereof with the aim of being transferred. Once released, the seller will inform the buyer by means of the current administrator’s email
  • Receiving the communication of release by the seller, the buyer will request that the registrar send the authorization code via the administrator’s email
  • With the authorization code, the buyer must fill out a formal written petition that is sent to the registrar and requests the effective transfer of the domain.

Payment

With respect to the price payment, it is common for the contracting parties to agree to the formalization of two separate payments in relation to the obligations described above:

  • The first payment, for example, composing 15% of the agreed price, is to be paid within the following two weeks of signing the contract, for the purpose of a down payment or deposit
  • The second payment, the outstanding amount – in this case the 85% remaining, – is to be paid within the following two weeks of effective domain transfer to the buyer
  • Between the first and final payment, the seller, along with the domain registrar, must carry out all required technical procedures which correspond to them, as according to the contract.

In view of the above, it is of vital importance that the technical steps of domain transfer are made clear in relation to the obligations of the contracting parties. Otherwise, we may find ourselves in a contractual gap or “grey area” without knowing who needs to carry out what steps and when.

This article is not considered as legal advice

Luis Trigueros Von Korff

Luis Trigueros Von Korff graduated from ESADE with a Law degree. He specializes in commercial law, specifically in the areas of corporate law and bankruptcy law. For any further enquiries please Contact us