Business Contracts Website Ownership Agreement

[fifteenpercent]

I signed a website ownership agreement back in Sept 2009 which read as follows (names/domain kept private):

This contract is in reference to the domain name and company within *websitedomainname*. It is for a 15% equity stake. The two individuals being entered into this contract are Party A (Owner) and Party B (Equity holder).

This means that 15% of total profit (this is calculated after operation cost of server/hosting) from any type of advertising revenue shall be given in whole to Party B on a month by month basis. This 15% also includes a percentage of the company's selling price if/when the company is ever sold for a sum of money.

I, Party A, consider this contract to be legally binding and agree to the above terms. I acknowledge that I am giving up 15% of my company to Party B as a whole.

Hosting, advertising and the domain name were all in Party A's name, I am Party B.

At the end of 2010 I was able to acquire a better website domain and we switched the site over but no amendment was made to the original contract and no new agreement was made in regards to the new domain (which is registered to me).

Party A has since sold his 85% share to a new party, Party C. I am finding negotiations with Party C to be very difficult as Party A wasn't completely honest (Party C believed he was getting ownership of the domain as well). No contract/agreement has yet been signed between myself and Party C. Party C is the named person on the hosting and advertising contract.

Party A is from America, Party C is Canadian and I am from the UK.

What are my rights in regards to the domain and the website if I chose to a) point it elsewhere b) sell it?

 

[Michael Wechsler]

Without seeing the domain name and website business agreement, I can't tell you. What I can tell you is that as a minority shareholder, you have a problem. But that said, with regard to the new domain, the other business holder has a problem. There is no agreement made for ownership of the new domain. It's not quite clear what the arrangement was - or was there an arrangement? The truth is that Party C should have done due diligence properly in order to determine that one of the most important assets the company has - it's domain name - was legally registered to the company he or she is acquiring. An intellectual property attorney is probably the best person who can review all the documents and provide you with a good evaluation that approximates the legal reality.

With regard to the domain name, you are the legal owner. Party C may object to it but might have proof problems and will need assistance from Party A in order to make his case. With regard to the website, it's difficult to argue you own that piece of intellectual property which is a separate piece of intellectual property owned by the company and apart from the domain name.

This is a mess. It is probably best handled with negotiation with Party C and finalizing some deal to put it to rest. You do have leverage with the negotiations and that is something to keep in mind with regard to getting what you believe is a fair deal. You'll want to hire an attorney to draft the agreement. Each of you will probably require your own attorney since there is a conflict in your interests.