Defendant listed a domain name for sale using DomainAgents. After a couple rounds of negotiation, plaintiff accepted defendant’s counteroffer to sell the domain name. But when the time came to put the domain name in escrow to enable transfer, defendant backed out of the deal, saying he had changed his mind. Plaintiff sued for breach of contract and sought a temporary restraining order that would prohibit defendant from transferring the domain name.
The court granted the motion. It agreed with plaintiff that it was appropriate to determine the motion ex parte (that is, without giving notice to the defendant) because the defendant could transfer the domain name in the meantime, thereby depriving plaintiff of the ability to procure an irreplaceable asset.
It found plaintiff would likely succeed on the merits of the breach of contract claim, because plaintiff had shown that a valid contract likely existed, that plaintiff was willing to perform its end of the bargain, that defendant had breached by refusing to go through with the transaction, and that plaintiff had been damaged due to the loss of the ability to procure the domain name from defendant.
The court further found a likelihood of irreparable harm to plaintiff, in that defendant’s communicated belief that he was not bound by the purchase agreement indicated he would sell the domain name to another interested party. If that were to happen, plaintiff would have no recourse against that purchaser, who was not in privity of contract with plaintiff.
Moreover, the court found the balance of equities favored plaintiff. The temporary restraining order would only be in place until a further hearing on injunctive relief could be had, and defendant would not otherwise be restricted from using the domain name in the meantime.
Finally, the court held that the public interest favored granting injunctive relief. The public interest strongly favors enforcing contracts.
Jump Operations, LLC v. Merryman, 2022 WL 1082641 (D. Nev., April 8, 2022)
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