Business Thread Alert - Liability when buying a website?

[MovieMaster]

I am working through a mainstream non adult deal which has two parts...

Part 1: Purchasing a forum which on its own hold no liability and is purely an asset of a "sole proprietor"



Part 2: Past owner went on awol on drugs or someshit and pocketed 15k of customers money without delivering the product through is yahoo store.

I would be buying his domain name as it related to the yahoostore account, the domain is dogshit since reputation is so bad within the online community but still gets steady seo traffic and seo orders where by i would filter it my own site... or hire someone unrelated to my site / name to run it thus not being confused with the past owner

My question is 1 upon buying the assets of his sole proprietorship, does this open me up to that 15k liability and any other he might not be disclosing?

Or by buying sheerly the assets am I free and clear?

assets would be : yahoo store account , customer database , domain names. no hard goods since its a drop shipping setup.

Or would only buying certain parts be ok and other be questionable?

again this is a sole proprietorship and NOT a LLC or Corp.

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lastly how would you arrange the deal...

[icymelon]

you probably really need to talk to an attorney. you could even start with prepaid legal and talk to one on the phone who would give you some legal advice for now until you can find someone locally. always best to get 2 opinions.
does the site get so much traffic that you couldnt buy those clicks from adwords and direct to your own site while you build your own seo traffic.

[MovieMaster]

The way I worked "part 2 of the deal" was that I did not want to buy or put anything upfront at all becuase I don't know wtf I am getting into and what its worth and etc... So the deal was 50/50% split, i work his site or outsource it and he would get the remaining 50% of net profit for x monthes and then take ownership of the yahoo account, domain names.

[seeandsee]

you need somebody like laywer to tell you what will be in that case

[Adraco]

I have done similar purchases and had two lawfirms in Chigaco look into it for me. Each time they recommended to treat it as pure assets or even just write in the contract to just buy the domain as an asset and then have the seller send me a copy of the site but not write anything about it in the contract. They specifically told me that the domain in itself holds no liability and can not open you up for any kind of litigation or so.

But each deal is a little different, so you might want your own advisor. I can only speak for how things went for me, in my situations and i've never had problems with it.

[Marcus Aurelius]

Buying sheerly the assets you are free and clear.

Dont make any contract, just do it through escrow.com

[ShellyCrash]

I wouldn't reccomend doing it on your own, think you should talk to a lawyer and have them help you, but I know from going through and working on a few aquisitions it is put into the purchase terms who's responsibility any debt or liability will fall under. So something to the effect of any known debt or cost up until date of sale shall be paid by seller, and any undisclosed debt or liability will be seller's responsibility.

[IllTestYourGirls]

Spend the $250 bucks for a lawyers help

[DateDoc]

If he is getting 50% from future sales that 50% should a least go to the customers he ripped off. Either way with him as a partner I cannot see how you could not be liable. If there are enough complaints Yahoo may just shut you down too.

[MovieMaster]

DateDoc good point, the % deal doesnt make sense and seems like it would open it up to liability... I guess working at 4am clogs the thought process hm.....

[czarina]

dont buy a website... get a new one designed by me ;)

[Paul Markham]

My first piece of advice is not to ask legal questions on GFY, get a lawyer.

[pornlaw]

It will depend on what the purchase contract states. It can be an asset purchase or it can be a lock, stock and barrell purchase. Whether you have liability will turn on what language is in the contract.

Also, you have not given enough info to be able to give you an opinion as to the other issues, but without a contract the Uniform Commercial Code will rule your purchase.

The UCC will act as your contract if you dont have one. You may want to spend the $500-$5000 on a lawyer drafting the contract to say yourself problems and litigation later that will be far more expensive.

Good luck and be smart.

[$5 submissions]

You would be a successor in interest. If the asset you're buying constitutes the whole business, you might be on the hook. Definitely talk to an attorney. This might be a case of unwittingly stepping on a landmine.

[MovieMaster]

Yea, I am already stepping away from the purchase of the online store and just going to close on the purchase of the forum... and possibly the domain names and thats it.

[FeelMyTube]

guess it depends the case you describe seems like responsability is from the previous owner not the site itself.

[lagcam]

It all sounds moody to me.

Working 50/50 with even a straight partner is hard, working with a guy who needs money and knows how to rip people off is a lot harder.

Assuming of course you are not actually both parties yourself ;)