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I own a web development company. We were approached by an individual who had purchased a company and planned to rebuild the website and rebrand. Right after the call we found and purchased the domain for his new brand for him, not to keep ourselves or sell back at a marked up value. Were a small town shop and most of our clients are new startups with very little technology skills. We're used to having to hold their hands. However in this situation I'm afraid we may have crossed a line.

Do you ever purchase domains for your clients? Or do you do only what is asked?

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    Insider trading is unlawful in just about every jurisdiction. The perceived retention leverage this gives you is an unjust enrichment. – mckenzm Sep 6 '16 at 4:53
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    It was a dick move. – Apfelsaft Sep 6 '16 at 7:01
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    I do not see this so problematic. The only thing is if you now offer him domain with fair price or will you try to get unreasonable high amount of money for it. If you get the job of course. – RenatoIvancic Sep 6 '16 at 8:30
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    We thought we were protecting him from domain lookups that buy the domains you search for. If you give explanations to this person, don't use that argument, or any other one that - like that one - begs for the question "Then why did you do that without telling me first ?". – SantiBailors Sep 6 '16 at 9:44
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    The question title to this should be changed to "Sniping a potential clients domain" – Tom.Bowen89 Sep 6 '16 at 10:47
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It depends what you do next.

If you say, "as a precaution I have acquired the domain names we were talking about. Please send me your details so that I can transfer the registration to your organisation ASAP, or if you prefer we can manage them for you", then you've jumped the gun and intruded slightly on a decision that really is the client's to make, but hopefully no serious harm done. You may have been careless, if the client would have made a different decision from what you made, but I think not immoral.

You should not necessarily expect to be reimbursed for them, especially if the client decides to use someone else (or to cancel the exercise entirely, or use fewer variants than you registered), since you weren't asked to do it in the first place.

You can't be sure you've done the right thing, since there may be disadvantages to registering now. Just for one example, if the domain registrations are listed in a whois directory, then you've made a publicly-available statement that your name and address are somehow involved with the new brand. Albeit not a very direct statement, or one you can easily profit from, but still. You can undo that if it's not appropriate, but undoing something bad doesn't stop it being bad in the first place.

If you say, "I have acquired the domain names, now let's talk about how much you're willing to pay me for them" then it's at least as immoral as any other domain-squatting, and I'd say rather more so since you acted on the specific and commercially-sensitive knowledge that your potential client would want those domains. NDAs establish that information is confidential and/or proprietary, but it doesn't follow that anything not under NDA is not proprietary, nor that it's always proper to act on it. I think in this case it isn't proper to squat a domain that your potential client discusses with you. To avoid squatting you can't demand payment for the domain, not even what you paid for it.

We thought we were protecting him from domain lookups that buy the domains you search for.

Then fine. Follow through doing that, by transferring the domains to the client or their other designated agent as smoothly as possible. But as a general principle, don't expect to be reimbursed for unsolicited services no matter how helpful you expect you're being.

  • I've already responded in the way you recommend. The client was thrilled that we helped him where he was not knowledgeable – stackoverfloweth Sep 6 '16 at 11:22
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    On the whole I think it's better, when you plan to do a potential client a favour, to check with them first that it's really what they want. The "pleasant surprise" is great when it comes off but a bit of a risk :-) – Steve Jessop Sep 6 '16 at 11:24
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    @stackoverfloweth however, does the client know whose name is listed in the whois directory? As Steve mentioned, he may be unpleasantly surprised in the future just by checking out in whois.net that it's your name or your company's name representing his company's website. – CPHPython Sep 7 '16 at 11:36
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Sounds like it to me.

It is one thing to purchase domains once you are hired but to go snipe the domains before you are hired is a pretty underhanded thing to do...

You've now put the client in a position where they must deal with you if they want the domains.

Even if you aren't marking things up, the client may have preferred to register via NetworkSolutions and you used GoDaddy. The Terms of Service are different at different registrars... and you've locked this possible client into things they may not want.

If I were the client... I'd be contemplating legal action.

Really the client should have registered domains on their own right away before seeking developers. But that doesn't excuse you sniping the domains.

It was a very unethical move in my opinion.

-- Moved from comment ---

There are considerations such as "trade secrets" and "professional expectations". Information was shared with you to facilitate your business interaction, not so you could immediately pounce on the idea without discussion, regardless of your intentions - helpful or otherwise.

Be aware not everything requires an NDA for you to be held accountable. If there was a reasonable expectation of secrecy and you profit by breaking that expectation... well... a judge/arbitor may need to decide

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    Of course you'd disagree. There's still a concept of "trade secrets" and "professionalism" that may or may not mean a judge would see your actions as a breech of secrets in an unwarranted manner. I'm not an attorney or judge so I can't say for certain. But that doesn't mean the client can't contact their legal advisors. Things do not always require an NDA for you to be held ethically accountable. If there was a reasonable expectation of secrecy and you profit by breaking that... well... a judge would need to decide. – Scott Sep 5 '16 at 18:18
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    @stackoverfloweth: It sounds like he didn't make the information public: He told you in confidence. – John B. Lambe Sep 6 '16 at 0:05
  • I completely agree with all your points, though I have witnessed cases where the clients did not want to know any technical details of what "having a company website" entails. One especially wanted me to have complete control over everything (annual payments included), but even in this situation I handled them all the available options in the market and made them choose by themselves... I must say, this did not make them any happier and they literally did not care. – CPHPython Sep 7 '16 at 11:46
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    Well, this isn't really about control..... no one was hired... domain names were essentially sniped. That makes all the difference. If you're hired and discuss things and the client "just wants it done" that's a different matter entirely. – Scott Sep 7 '16 at 16:57
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    You're referring to a completely different scenario. And I do not make the same correlation you are making. Yes domains can be held hostage by some, yes I think that's unethical as well. But that is not what this question is asking. – Scott Sep 8 '16 at 14:10
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Yes it was wrong. You should have said "I would advise you to buy your domains ASAP and as a matter of urgency. Domains can disappear very quickly."

I use this advice as a friendly warm up when presenting a quote. It means we give good advice, are honest and up front, and are a reliable source of information.

What you did was really bad. If I had been that client, I never would have trusted you again. It was underhand, bullying and even without an NDA, an abuse of privileged information. I would strongly urge you to not repeat this again, and immediately put in writing to the customer an apology, that the domains are theirs even if they do not take up your quotation, change the domain owners name to theirs, and give them all the info they need to manage the domain directly themselves.

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    +1. To save some face, the OP could word the apology to suggest there was an error and they hard started the standard setup for that client preemptively due to marking them down as a client when they're not yet... so long as this kind of thing doesn't happen again, it may help smooth things over. But please, please don't do this kind of thing. – jammypeach Sep 6 '16 at 9:47
  • Agree entirely, blame it on an over zealous junior developer. – PaulD Sep 6 '16 at 12:38
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    When the question was "is this immoral?" I'm not sure that advising to falsely blame someone else for your own decision cures the problem. Probably best stick to the apology and resist the urge to cover-up ;-) – Steve Jessop Sep 6 '16 at 17:52
  • Well, I doubt from the tone of the OP they were being 'evil', and truth is always the best policy. The other day I overslept and told a meeting, that I was late to, that the traffic had been bad. The OP asked if they had crossed the line and they had. The suggestion was then made to save face a bit and I agreed. Blaming it on a junior developer comment should have had a smiley face at the end of it, Tongue in cheek comment but although the OP crossed the line, they did not mean to trap the customer or scam him, so face saving allowed IMHO. I think everyone has agreed that they should retract. – PaulD Sep 6 '16 at 20:26
  • I don't agree with blaming it on anyone - I simply meant that it could be put down to an administrative error - in no way should the OP dodge responsibility for that, or name some poor underling to take responsibility. Just that it could help the client take the news in a way that doesn't destroy the relationship. – jammypeach Oct 13 '16 at 14:12
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Of course it was unethical.

You used information that the client (or potential client) trusted you with - gave you with the assumption that you would handle it professionally and ethically - for your benefit, to the detriment of your client (preventing them from acquiring the domains, except through you).

You point out that you didn't sign an NDA or make any agreement, as if that makes it okay. Business dealings generally require some trust between the parties. Who could trust an organisation that thinks that way: That seeks any underhanded way to make money from the client, provided that it is not actually illegal? (And they might have grounds to sue.)

Most clients would assume some basic ethics and professionalism of the company they are considering hiring (so wouldn't ask you to sign an agreement to not cheat them before they even discuss their project).

You further point out, in a comment, "It's on him to purchase the domain before making that information public", as if that makes him fair game to be ripped off by a company he trusted enough to consider hiring.

I would suggest that you should transfer the domain to him immediately, with no conditions attached. It would seem highly unlikely that he would ever trust you again, but he will probably warn others about you, and it won't sound as bad if you give him the domains.

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    +1 I would certainly suggest to @stackoverfloweth (who IMO probably just made a poor-judgment mistake and is not as reckless as it might initially sound otherwise he/she wouldn't have posted this question and apparently is now kind of panicking when he/she writes ugly comments like the one you quoted) to do urgent damage control as you mentioned. – SantiBailors Sep 6 '16 at 8:15
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I used to work at GoDaddy and saw this all the time. It was always the same story. "my web developer hosts it for me.", "my web developer bought all my domain names." I advised against it in EVERY CASE! No, you get your own hosting account and give them access to it! You buy your own domains and call us to set up DNS for you!

What I have done in the past with clients that I knew were computer illiterate (once they were confirmed clients), is

  • set up accounts at GoDaddy or Inmotionhosting
  • made purchases on their behalves
  • gave them access to everything right away to change passwords in front of me so they knew I wasn't trying to keep their stuff.

Give them their domain - without a mark-up - and you will look honest. But upcharging a $12 domain name hardly seems worth the small town ridicule.

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I'm not as deeply involved as most posters to this question, so grain of salt, and I am perhaps learning, but this sounds like diligence and the intent was to profit the client. Several things, such as tying up the client's potential choices are assumptions in this thread; the client, for all we've been told, is free to buy the domain(s) at par, or not to buy them -- thus no cost. Small town services typically exceed and are more personal than in large towns and cities: the real world hasn't changed that much.

The legal side is bound by practice and best practice, but those are refinements to a suit that is not known to exist in the context of this thread: assume there is or is not a standard business contract, and then assume there is almost nothing standard about creating contracts or doing business each and every time. Initial agreements or even a brochure could ethically inform (clients, potential clients) about steps taken to initiate services: that would be a good practice.

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This was a move in desperation. If I were such a client, I'd be concerned that you would be likely to overstep again. What's the next move? The client needs a bank account, and you go down to the bank and start talking to the branch manager? The client is interested in office space, and you go out to start making a deal with a leasing agent? I'd pay you off for my domain, and find someone else who respects protocol.

The fact that you did this with Ma and Pa Kettle (who might not know better) in Smalltown USA doesn't make it right. Performing unsolicited services like this will keep you from working with anyone besides businesses like Ma and Pa, because it potentially can cause a snag in their business that you might not be able to undo easily. No one's interested in the potential fallout.

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If you purchased the domain immediately after the call, there is no reason why you could not have simply asked your client if they wanted you to do so during the call--or you could have called them back prior to purchasing it, if you weren't already searching for it during the first call. Next time, clear it with the client first, in case they want to handle the registration themselves.

Now that the damage is done, you should apologize to your client in writing for not consulting with them first, then offer to transfer it to them or manage it for them on their behalf--in either case, make it clear in writing that the domain belongs to them regardless of what they choose to do, and you will cover the costs of registration and management for the first year, including transferring to a different registrar if they prefer a different one. Either way, you're probably only out at most $20 or so, which you should be able to easily absorb if you're charging a fair and reasonable fee for your development services.

If the rebranded site is not yet ready to launch and redirecting to the existing site is not appropriate, consult with your client regarding what to do with the domain until it is ready to launch.

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