Bargain Price Purchase Option

December 07, 2013  |     |     |   0 Comment

A bargain price purchase option generally applies to a lease agreement such as in domain leasing. In this arrangement, at the end of the lease term, the lessee has the option to purchase the domain name at an agreed-upon price which is considered less than its fair market value.

The lessee may have invested time and money in developing the domain name into a successful website. This bargain price purchase option gives the lessee the incentive to purchase it outright at the end of the lease term at a bargain price. This bargain price is not available to any other prospective buyer.

The lessor would have received steady lease payments during the lease term. Thus, the lessor is more likely to be willing to receive less money from the lessee in a domain name sale.

Author: 

Kris Tabetando provides mergers & acquisitions (M&A) advisory and brokerage services to Internet companies. He also partners with investors to acquire & manage Internet businesses.

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