Domain Management Tools: Asking the Difficult Questions
Why ask the “difficult questions”? Well, quite simply, the difficult questions are the ones that need asking. Pretending something doesn’t exist doesn’t make it go away.
I have seen a number of positive, virtually promotional posts about dnZoom in the domain space over the past few months. Since dnZoom works with domain industry vendors via their APIs, it is understandable that domain industry players would be supportive of the company and it’s efforts. It’s a good, honest try at doing something good. Since all domainers (this one included) could benefit from a feature-rich, centralized management system for domains, the dnZoom concept is very welcomed among individuals, too. And since it seems the dnZoom people are very likeable, again, good reason for positive support. And it is now in public beta, which means it made it out of private beta, which is a very good sign.
But when I went to try the beta service, I came across this in the Terms of Use agreement (I added the bolding and font sizing to make it readable, but the ALL CAPS is how they made this section of the TOS):
LIMITATION OF LIABILITY
TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, strong>IN NO EVENT, AND UNDER NO THEORY OF LAW OR EQUITY, WILL DNZOOM, INC. (INCLUDING, WITHOUT LIMITATION, DNZOOM, INC.’S EXECUTIVES, DIRECTORS, OFFICERS, ATTORNEYS, MANAGERS, EMPLOYEES, CONSULTANTS, CONTRACTORS, AGENTS, PARENT COMPANIES, SUBSIDIARIES, AFFILIATES, THIRD-PARTY PROVIDERS, MERCHANTS, LICENSORS, OR THE LIKE) OR ANYONE ELSE INVOLVED IN CREATING, PRODUCING, OR DISTRIBUTING DNZOOM, INC.’S SERVICES, BE LIABLE FOR THE LOSS OF A DOMAIN NAME, OR ANY BUSINESS OR PERSONAL LOSS, REVENUES DECREASE, EXPENSES INCREASE, COSTS OF SUBSTITUTE PRODUCTS AND/OR DNZOOM, INC. SERVICES, OR ANY OTHER LOSS OR DAMAGE WHATSOEVER, OR FOR ANY CONSEQUENTIAL, SPECIAL, INCIDENTAL, PUNITIVE OR INDIRECT DAMAGES OF ANY KIND ARISING OUT OF ANY USE OF, OR ANY INABILITY TO USE, ANY DNZOOM, INC. SERVICES EVEN IF DNZOOM, INC. HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. DNZOOM, INC.’S TOTAL CUMULATIVE LIABILITY, IF ANY, TO CUSTOMER, OR ANY THIRD PARTY, FOR ANY AND ALL DAMAGES, RELATED TO THE TOU OR DNZOOM, INC.’S SERVICES, INCLUDING, WITHOUT LIMITATION, THOSE FROM ANY NEGLIGENCE, ANY ACT OR OMISSION BY DNZOOM, INC. OR DNZOOM, INC.’S REPRESENTATIVES, OR UNDER ANY OTHER THEORY OF LAW OR EQUITY, WILL BE LIMITED TO, AND WILL NOT EXCEED, THE ACTUAL DOLLAR AMOUNT PAID BY THE CUSTOMER FOR THE SERVICES WHICH GAVE RISE TO SUCH DAMAGES, LOSSES AND CAUSES OF ACTIONS DURING THE 3-MONTH PERIOD PRIOR TO THE DATE THE DAMAGE OR LOSS OCCURRED OR THE CAUSE OF ACTION AROSE.
So there’s the clue to the “difficult question” that needs to be asked. In these days of rising domain values and increasing challenges to protecting domain assets from misappropriation, can I afford to “trust” my domains to a third party management system if I have to agree to almost complete indemnity for them in the case of error or loss, even if they knew of the problem and didn’t fix it?
This agreement says that dnZoom will not be held accountable for anything more than the cost of the dnZoom service. I am not a lawyer, but by my read it says if they get hacked or the system screws up or they have a rogue employee and I end up losing a domain, dnZoom is only liable for the cost of the dnZoom service (currently nothing). Ditto if they make a mistake that costs me a domain, or anything at all that might happen, for that matter.
I have to indemnify them completely for all possibilities. Is this the best we can do when providing a centralized management service for domains, and if so, is it ready for prime time adoption?
I have to ask myself, “If there is enough risk associated with such a centralized system that they need to build in that all-capitalized indemnity clause to protect themselves, don’t I as a domainer have an equal obligation to protect myself?”
And how could I do that? Maybe I am missing something. Maybe I should have some other insurance in place, or some other way of covering myself for a problem arising from the use of a central system like this, so do let me know if you have such knowledge. I am only concerned because they built that clause into their agreement… otherwise, I was about to trust it with a free trial.
Unfortunately this post will probably get me dropped from a few blog rolls, and hurt my chances of getting a free pass to the next domaining event (or even an invitation, I imagine), but that’s ok. I’m more comfortable honestly asking difficult questions than keeping quiet when I feel like there’s a problem lurking. I’m really hoping someone can show me it’s just legalease and nothing to actually worry about?
Topical Tags:domainers


February 11th, 2008 at 1:25 am
I’m a customer and I did miss that in the terms. The way I see it from working with them, is they would more than likely work with you on any problems related the above mentioned examples. That being said, sounds like you’re fucked if they can’t fix it.
Do you have any experience with any of the other domain management companies and their terms? I’m not really familiar with any others as I still manage most of it myself. I certainly want to reach the point where I can concentrate on the investment and not the grunt work.
February 12th, 2008 at 10:59 am
John,
Great Blog! I think it’s important to discuss issues like this too.
Our TOS is standard or boilerplate for any software company offering a product or service to market. I have included just a few in the domain industry, but could keep going if needed. I am somewhat curious why you didn’t call first or email asking someone for explanation, but rather discriminate without checking the facts first.
We rest on our many (7) years of service and reliability to the hosting industry as references for our security, honesty, and integrity.
Here are some examples:
Google
GoDaddy:
DomainSponsor:
Sedo:
February 12th, 2008 at 11:49 am
John,
Enom’s is even better:
@DAN: Good find… I added the bolding to highlight the part where we pay THEM if there seems to be a security issue.
February 14th, 2008 at 5:33 am
None of this new.
Each and everyday Internet companies –Google, Yahoo, Enom etc. are all starting to look like big banks or utility companies.
They are happy to charge ongoing and regular fees (read: no work —it’s automated and 100% profitable)
BUT
When they totally destroy your business by say “losing” your domain you’re not supposed to be able to sue them because you all ready surrendered that right.
What a crock of sh*t.