Steps to Take when Purchasing an Existing Website

purchasing existing website

[QLifeTilt]

Can anyone help me understand the process or steps I would need to take when purchasing an existing website?

I have an interested seller, and we're planning on using an escrow service to complete the transaction.

A couple questions I have are:

1. Would I need any legal docs from [a service selling prewritten legal documents]?

2. Is a no-compete clause necessary?

Thanks in advance everyone!

[edited by: buckworks at 1:42 pm (utc) on Jan. 25, 2009]
[edit reason] Removed specifics [/edit]

[Quadrille]

If you intend to run the site 'as is', and it's a serious money site, then you would be well advised to protect yourself against a past you know nothing about, but which may return to haunt you.

If you plan to change it all, and/or there's little size or money involved, such protection may be less 'necessary' - but the fact you ask suggests you need to think carefully.

A no compete clause is only necessary if you think that's a risk. Is it?

If you are in the same country as the seller, agreements matter; if you are in different countries, the costs are less justifiable, because enforcement is less possible (unless very, very big sums are at stake).

But within the UK, for example, a contract is an agreement between two parties. So a formal exchange of letters, with the seller stating he won't compete, will probably stand up in court for direct competition, but not if he does something 'slightly different', they you argue is competition, and he denies it.

NB - these are my views and IANAL! - I'm offering things to consider, not legal advice. :)

[edited by: Quadrille at 4:08 pm (utc) on Jan. 25, 2009]

[Webwork]

A lot depends on how much money is at risk and that depends, in large measure, on how trustworthy the seller is. If your seller is a known "good guy/gal" then a handshake is all that's required in most cases for the deal to proceed.

OTOH, you can write a 20 page contract, in an attempt to lock-in a SOB, and that SOB could care less about your contract once he/she gets his hands on the money.

So, the first and most important step in any transaction is to size-up the person you are doing business with. Get references. Check their background. Etc.

Most contracts that are worth a damn spend some time defining terms or expectations. It's the unwritten expectations or the ambiguous ones that tend to cause problems. So spell out exactly what is and is not included or expected in the deal. Avoid or look out for "weasel words": try, may, etc.

Once you wrangle the terminology and terms THEN talk to a business or commercial lawyer who practices in the appropriate jurisdiction.

[QLifeTilt]

I appreciate your help guys. You gave me some good things to consider :)