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A legal question regarding site flipping

by jon99
11 replies
To the pros,

May I ask if someone will get into trouble if the site they already sold suddenly depreciated significantly in the possession of the new owner?

For example, the listing states that the site is earning XXXX of income, but instead during the possession of the new owner, the revenue dropped to X or XX instead. Likewise for traffic or other aspects that add significant value to the initial price of the site.

Legally, will the previous owner be responsible for this, since the new owner would most likely call for this as a scam and/or a refund?

Just curious, thanks in advance.
#flipping #legal #question #site
  • Profile picture of the author VegasGreg
    That would really depend on the sales contract of the deal. If future income was guaranteed (not likely) then there is a problem.

    If the current income and traffic was fraudulent or faked, then I can see a big legal issue.

    A lot of times though a site is making xxxx, but when sold, the new owner doesn't do the same type of promoting that is necessary to maintain that level.
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    • Profile picture of the author jon99
      Originally Posted by VegasGreg View Post

      That would really depend on the sales contract of the deal. If future income was guaranteed (not likely) then there is a problem.

      If the current income and traffic was fraudulent or faked, then I can see a big legal issue.

      A lot of times though a site is making xxxx, but when sold, the new owner doesn't do the same type of promoting that is necessary to maintain that level.
      What do you mean by "sales contract"? I suppose there is only a valid contract when it is done via a broker with black-and-white paper, or even if the sale is via escrow.com, the contract is only valid for the domain name? (The files must be settled via out-of-the-contract conditions as escrow does not support the files.)

      Can the email records/Private messages be used as a "contract" as well?

      What legal issue will the buyer get, if he faked the income or traffic? And if we reported this, how do the police know whether they are fake or not?

      Curious as I am planning to invest on some websites.

      Thanks alot
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  • Profile picture of the author markfail
    I have been asked this many of times before, usually by dishonest people who use paid traffic to make their website look busy when actually its not.

    The answer, to cover yourself and any buyer you SHOULD always have a sales contract which states in in what your selling, are you selling a guaranteed income of XXX every month or are you simply selling the site regardless of traffic and sales.

    A website making XXX today might make -XXX tomorrow, who knows but site flipping is a business, your developing a product/service and selling it, every business has a sales contract and that is what will save for XXX in court costs.
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    • Profile picture of the author jon99
      Originally Posted by markfail View Post

      I have been asked this many of times before, usually by dishonest people who use paid traffic to make their website look busy when actually its not.

      The answer, to cover yourself and any buyer you SHOULD always have a sales contract which states in in what your selling, are you selling a guaranteed income of XXX every month or are you simply selling the site regardless of traffic and sales.

      A website making XXX today might make -XXX tomorrow, who knows but site flipping is a business, your developing a product/service and selling it, every business has a sales contract and that is what will save for XXX in court costs.
      Thank you for the advice. But how do we obtain and sign a contract, when lets say for websites transactions in flippa?

      We will not be able to see each other, and how are we suppose to sign a contract then?

      If you mean a digital contract, will the contract be valid for court use then?
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    • Profile picture of the author jon99
      Anyone experienced enough to answer these questions?
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  • Profile picture of the author sbucciarel
    Banned
    Flippa sells a website contract. One of my customers purchased it and used it for my transaction with him. I'm sure it would hold up in court. As for signing ... US Postal Office is still operational ...

    As for the question of the site not performing after sale, a lot of my sites don't perform after sale. I sold a network of tattoo sites to someone who then "redesigned" them and they lost all their traffic and revenue that I had built up. That's their fault. If you buy traffic or put up fake screenshots, you could probably be sued. It's fraud.
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    • Profile picture of the author jon99
      Originally Posted by sbucciarel View Post

      Flippa sells a website contract. One of my customers purchased it and used it for my transaction with him. I'm sure it would hold up in court. As for signing ... US Postal Office is still operational ...

      As for the question of the site not performing after sale, a lot of my sites don't perform after sale. I sold a network of tattoo sites to someone who then "redesigned" them and they lost all their traffic and revenue that I had built up. That's their fault. If you buy traffic or put up fake screenshots, you could probably be sued. It's fraud.
      Thanks, but how do we know whether the screenshots are faked? Can we accuse someone of faking screens without proof, based on assumptions?

      We can sue a owner who buy traffic to increase the value of his site before the sale? This is a new thing for me, if this is the case, I believe alot of people are already sued.

      Just wondering, if there are any where to read up more on "What define fraud during site selling"?
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      • Profile picture of the author DesktopDayjobs
        Originally Posted by jon99 View Post

        Thanks, but how do we know whether the screenshots are faked? Can we accuse someone of faking screens without proof, based on assumptions?

        We can sue a owner who buy traffic to increase the value of his site before the sale? This is a new thing for me, if this is the case, I believe alot of people are already sued.

        Just wondering, if there are any where to read up more on "What define fraud during site selling"?

        I have a lot of these same questions. I know this thread is old, but hopefully someone can answer.
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  • Profile picture of the author DuncanMae
    Selling websites is a case of honesty really is the best policy.

    When selling sites you have to be 100% transparent with everything!
    Tell people where your traffic is coming from, how your content was created (original or plr) where your income was derived from, etc...

    Now this is the crucial part. Do this and you will avoid 99% of all problems.

    Back up every single claim you make with proof!
    If you can't back up a claim with proof, you can't include it in your listing.

    Take screen captures and make videos of all reports, showing up to date, real time proof of all your claims.

    If you're a buyer, read the seller's feedback. If they are new, then be extra vigilant with checking stats.

    You can also do a lot of your own research on a site. It's easy to find out where a site's traffic is coming from. What kind of traffic it is etc...

    To answer your question. If you have been upfront and honest with your claims, have proof, and have let the buyer know exactly what there are buying you will avoid any of the issues you have raised.
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  • Profile picture of the author sbucciarel
    Banned
    Fake screenshots ... I don't really know how that can be proven, but if it went to court, the seller would probably have to show verifiable proof of income.

    Fake traffic. That's easier. I bought a website and discovered that the seller had purchased fake traffic for the site. I saw it in the referrers and kicked myself for not asking for referrers beforehand. I emailed the seller and demanded that she cease all paid traffic to that site immediately. She did and I had clean referrers and built up the traffic ... real traffic and sold the site at a profit, so that came out fine, but always ask to see referrers, Google analytics ... whatever to see where the traffic is coming from.
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  • Profile picture of the author Underground SEO
    If you want to know for sure then you would have to ask an attorney, I wouldn't take legal advice online
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