Company says seller tried to raise the price from $38,000 to $380,000 after learning who was buying.
An Australian business has filed a lawsuit after a domain name deal allegedly fell apart when the seller tried to raise the price tenfold.
Pay.com.au Limited sued (pdf) Dean Adams, the registrant of PayRewards.com, in the District Court for the City and County of Denver on April 17.
The company claims that Adams agreed to sell the domain name for $38,000, and he initiated a transaction through Escrow.com. Pay.com.au agreed to the transaction on Escrow.com and funded it.
According to the complaint, Adams attempted to renegotiate the deal after learning the buyer’s identity. He demanded $380,000 for the domain and stated that the price would increase by 5% each week unless paid.
He also threatened to sell the domain to someone else, according to Pay.com.au.
On April 22, the judge granted a temporary restraining order, preventing the domain name from being transferred or deleted. Adams did not appear at the hearing for the temporary restraining order. The lawsuit also names NameBright and its privacy service, which did not object to the order.
Historical Whois records at DomainTools suggest that Adams acquired the domain from HugeDomains in 2022.
Pay.com.au helps businesses earn points and rewards on their payments, hence the company’s interest in the domain. It owns the matching payrewards.com.au domain.
The company raised $15 million at a $303 million pre-money valuation in December.
ouch. I guess, from the seller’s perspective, risking $38k to secure $380k is probably worth it in hindsight, even though it didn’t pan out. That said, as a seller, the pain of selling a domain for far less than you realize the buyer may have paid is the cost of doing business, that’s why we engage in price discovery, that’s why we (sometimes) pay brokers, that’s why buyers hide their identity. The seller’s behavior shown in the complaint is beyond embarrassing and I hope the court sides with the buyer. Playing hardball in a negotiation can be fun, and a little dramatic flair is welcome, but this goes far beyond that.
In all likelihood he will have to sell for the original amount agreed upon.
Escrow.com is not a sale contract. It only handles payment and delivery.
A binding contract requires clear agreement on terms and parties. Here, the buyer negotiated under a personal name, but turned out to represent a company. That was never disclosed.
A hidden party cannot enforce a deal they were not part of, and the seller cannot be bound to someone he never agreed to.
If represented, the seller has a strong defense. Without representation or proper response, he risks default. Courts do not verify facts if one side stays silent.
That’s a naive take. Two parties can be in a “binding contract” merely by agreeing to a deal over an email.
The seller named a price and set up escrow. The buyer agreed and paid for the domain.
I don’t think the sellers has much to stand on here, unless the plaintiff left out critical details in its lawsuit.
This isn’t just about emails or escrow. The core issues are undisclosed party, lack of mutual assent, jurisdiction, and missing contract terms. The seller negotiated with an individual, not a company. The company only surfaced after escrow was funded. That’s not a valid contract with them, it’s a bait-and-switch.
And if we go over the pdf you attached, I don’t recall even seeing any formal contract laying out terms like governing law, warranties, transfer obligations, or dispute resolution.
Just a price and an escrow setup? That’s thin ground to demand performance, especially across borders, with no defined buyer or seller identity, and no underlying terms to govern the deal.
Ask High Times how that worked out for them.
If you’re implying that was a win for the buyer, you may want to revisit the case. 420.com was not a win. They settled, the owner kept the domain, then failed to pay. The domain remains tied up years later.
In the PayRewards.com matter, the buyer was unknown until they accepted Escrow. The seller initiated the process, discovered the buyer’s identity, and withdrew ——understandably so, given a tenfold price difference. Without a binding agreement, he was well within his rights, regardless of how one feels about his behaviour.
Escrow.com is not a sales contract. It simply facilitates payment. A separate, clearly defined agreement is required to form a binding sale.
At the very least, the domain owner ought to seek advice from a competent IP solicitor, such as John Berryhill, before choosing not to defend what appears to be a strong position.
Maybe Mark is one of the Freak Brothers?
https://en.m.wikipedia.org/wiki/The_Freak_Brothers
Go back to law school fool.
Sellers like these are the absolutely F’ng worst. I literally dealt with a handful of sellers like this. Once the saw my website name (and im a nobody) the price increased 4x. Once that happens I cut off all communication with them and blacklist the domains. Three of the domains are now expired, others have dropped their price below what I offered. Idiots.
That’s not serious.
First the defendant made an offer of 25K, quickly retracted then the prospective buyer comes with two “appraisals” of 5K.
Then the defendant offers to sell for 678K, then 35K, then increases the price to 38K (“I SWEAR ON MY MOTHER IM NOT SELLING FOR A PENNY LESS!!!!!”)
I have had to deal with such a character in the past. Not a pleasant experience, and the transaction did not go through.
Good luck to the buyer.
PayRewards .com is a definitely reg-fee domain for resellers or mid $xxx – low $X,XXX for end users. The seller is a rich or just dumb.
Tip for Seller: grab $38k and run.
That’s the sort of behaviour that gives domainers a bad name. The seller was getting a good price for the name, and to be honest he well and truly deserves to lose the case.
Seller will likely be forced to accept the $38K.
Sellers are responsible for researching your buyers market. It sucks to find out the buyers budget could have afford much more.
It reminds me of the wormhole*com fleecing by impulsive desire to sell. He tried to back out of his $50K asking price.
Courts forced him to sell.
You make an offer to sell, its accepted, and you honor your word or the Courts will enforce your agreement.
What an integrity-free fool Mr. Adams showed himself to be. The intrinsic value of a domain name is independent of who the buyer is. He should of had it priced at $380,000 in the first place irrespective of whatever buyer came along. He didn’t and then he reacted emotionally when he found out who the buyer was. Foolish behavior.
Anyone who has been in this business for a while has sold good domains to people or companies that would have paid more then the price the name sold for.
It has happened to me but I agreed to the price and I’m happy with the money I made.
If I were the buyer I would say take the deal or my price will decrease 5% each week. Most likely it will be a long time if ever before he sees an offer for $38,000 for that name.