[registrars] Fw: "Apparent Authority" Analysis
Registrars, I have proposed that commentary on this document close this time next week. If you have any further input that you would like added, please forward to me directly for inclusion in the final doc (assuming it is consistent with the prior mandate that I've received from the constituency and that I can convince the other TF members that the input is "A Good Thing"TM ;) -rwr ----- Original Message ----- From: "Ross Wm. Rader" <ross@tucows.com> To: "Transfer TF (E-mail)" <nc-transfer@dnso.org> Sent: Tuesday, May 14, 2002 4:36 PM Subject: "Apparent Authority" Analysis > > > Separately, Ross Radar will post the output of a > > small drafting team on other work underway. > > Folks, > > Pursuant to our last conference call, a small drafting team was convened to > create a baseline document that could act as the "lightning rod" for > comments concerning the scope, definition and role that the concept of > "Apparent Authority" should play in the TF deliberations. > > Starting with the original AA document that I posted on behalf of the > Registrar Constituency last year > (http://www.dnso.org/clubpublic/nc-transfer/Arc00/msg00022.html), the > drafting team endeavored to incorporate the substantive commentary and > analysis that has taken place since on the various conference calls, > privately, as well as through the mailing list. > > The attached document, which at this point has been well-edited by our Chair > and other drafting team participants, (thanks to those that helped out) is > ready for a second round of criticism and analysis by the larger group. > > With the permission of the chair, I would like to propose that commentary on > this document close 5 business days hence, at which a final document will be > prepared taking into consideration any further commentary and analysis put > forth by the larger group. > > If there are any questions or comments concerning the document or its > preparation, please do not hesitate to drop me a note via the TF list. > > -rwr > > nc-transfers-draftingwg-appauth-v0r0d6-051402.doc > > Created by rrader on 04/22/2002 15:01 > > Last Modified by rrader on 5/14/2002 16:22 > > Names Council Transfers Task Force > > Drafting Working Group > > Apparent authority > > Version 0, Revision 0, Draft 6 > > April 22, 2002 > > > > This document is presented as a preliminary draft to the full TF for their > comments over the next five working days. This is one part of the TF work > in addressing transfers and deletions of domain names. This document > explores what is meant by apparent authority in the context of > inter-registrar transfer of domain names. There may be other questions, > which need addressing further, related to ensuring that the experience of > the registrants and registrars are understood and reflected in any revised > or enhanced policies. Further examination and elaboration will also be > undertaken on express authorization to determine whether any policy > recommendations are indicated. > > Overview > > In a shared registry environment in order for competition to succeed, the > ability of registrants to transfer domain names from one registrar to > another, must be fully supported, be simple to accomplish, easy to > understand and efficient. However, a registrant's rights in a domain name > must also be safeguarded against unauthorized or accidental transfers. These > processes must be mutually efficient and reliable for registrars, as well. > > This balance between efficient domain name transfer on the one > hand and safeguarding registrants’ rights on the other has been provided for > by including the concepts of express authorization and apparent authority in > the standard gTLD Registry/Registrar contracts. One of the questions before > this TF is whether these concepts are adequate guidance for policy to the > registrars, and what constitutes apparent authority and express > authorization, in order to provide a recommendation on any needed policy > changes, subject to consensus agreement. > > Why is apparent authority an important concept? > > Exhibit B of the Registry/Registrar agreements specify that "...for each > instance where an Registered Name holder wants to change its Registrar for > an existing domain name, the gaining Registrar shall obtain express > authorization from an individual who has the apparent authority to legally > bind the Registered Name holder." > > All of the gTLD agreements include policy governing > holder-authorized transfers (inter-registrar transfers authorized by the > holder). Exhibit B of these agreements is the relevant section. This policy > requires that the registrar that is proposed to "gain" the registration, > obtain express authorization from an individual who has the apparent > authority to bind the registered name holder. The "gaining" registrar must > document this. > > The concept of express authorization is relatively commonplace. > It is the converse of implied authorization and therefore connotes a > specificity normally only available in a written instruction (ie – > facsimile, email or other non-oral affirmative agreements – in other words > “written notice”). > > It would be unworkable for this level of authorization to have > to be obtained from the Registrant directly in every instance. Many > Registrants do not wish to concern themselves with the day-to-day > maintenance of their domain registrations. The concept of apparent > authority therefore allows a person authorized by the registrant to > legitimately interpose themselves between the registrant and the other > participants in the transfer process and in doing so, enter into binding > contracts on the registrant's behalf. Apparent authority is also obviously > necessary where the registrant is a corporate body since it must act through > natural persons who must have authority to bind the corporation. In order > to request a transfer, the Gaining Registrar must obtain Express > Authorization from an individual with the apparent authority to bind the > Registered Name Holder to the terms of transfer. Further, the form of the > express authorization is at the discretion of the gaining registrar. > > If the Gaining Registrar does not obtain express authorization > from an individual who as the apparent authority to approve the transfer, > the transfer request cannot be deemed as valid and therefore should not be > undertaken. The importance of apparent authority is therefore both practical > and conceptual. From a conceptual standpoint, all involved must understand > what apparent authority is, how it is obtained and revoked, how it is > identified and when it is not reasonable to assume that someone does not > have apparent authority to approve the transfer. From a practical > standpoint, without these understandings, it is impossible to develop > processes that allow transfers to occur efficiently and in accordance with > the wishes of registrants. > > What is apparent authority? > > Apparent authority is not explicitly defined within any of > ICANN's contracts - registrar, registry, etc. This has caused concern with > some parties because any perceived ambiguity in interpreting this specific > statement can lead to the implementation of inappropriate process by > registrars and registries. The victim of these inappropriate processes will > almost always be the registrant. It is important to note however that the > apparent authority is a concept of agency law and not some creation of ICANN > policy; > > "The elements of apparent authority are: (1) a "holding out" of > the party as an agent; and (2) reasonable reliance by a third party on the > principal's conduct. See Raglin, 230 Ill. App. 3d at 647-650; Gilbert, 156 > Ill. 2d at 523. See also Restatement (Second) of Agency, 265, 267 (1957). > The apparent authority theory focuses on "holding out" someone as an agent > and reasonable reliance by a third party on such representations. See > Raglin, 230 Ill. App. 3d at 647-650; Gilbert, 156 Ill. 2d at 525-526. As the > court in Gilbert put it: > > 'Apparent authority in an agent is the authority which the > principal knowingly permits the agent to assume, or the authority which the > principal holds the agent out as possessing. It is the authority which a > reasonably prudent person, exercising diligence and discretion, in view of > the principal's conduct, would naturally suppose the agent to possess.' > Gilbert, 156 Ill. 2d at 523. > > Whether a person has notice of an agent's lack of authority is a > question of fact. Gilbert, 156 Ill. 2d at 524." > > [For more details, refer to > http://www.state.il.us/court/Opinions/AppellateCourt/1998/1stDistrict/March/ > HTML/1953959.txt where this text was originally excerpted from.] > > Who possesses apparent authority? Who Does Not? > > The most important concept regarding apparent authority is that > it must be authority that the third party reasonably believes flows from the > Registered Name Holder. It is not enough that someone holds themselves out > to have apparent authority, but rather it is reasonable in the circumstances > for the registrar (and the registry which must then act on/accept the > request) to believe that the person issuing the transfer request has the > authority to issue that transfer instruction and thereby legally sever the > contractual relationship with the losing registrar and form a new contract > with the gaining registrar. . > > The governing agreements are the Registrar-Registry Agreements > between the various registrars and registries. Apparent authority can only > be defined within the context of the relevant rules of law and these > contracts. It is not appropriate for this task force to attempt to re-define > what pre-exists in national law. > > In each registration, there must be a registration agreement > between the registrar and the registrant. This is required in all of the > Registrar and Registry agreements. The supplier of the end-to-end services > already has entered into an agreement with the Registrar, that agreement is > either made in its own name (it is the Registered Name Holder) or it is > entered into with the customer. In order that it is legally correct, the > customer must have bestowed apparent authority as part of that agreement > (the second one described) therefore, they would already have the authority > to enter into the transfer. > > Louis Touton has already clarified in communications to the > Registrar Constituency, "If there was a contractual provision in the ISP > subscription agreement appointing the ISP as an agent/attorney-in-fact for > registrar sponsorship, this would be acceptable as apparent authority. > Simple contractual language absent this agent/attorney-in-fact language > would not be sufficient to convey apparent authority to an ISP. > Notwithstanding, the gaining registrar would still have to provide existence > of this documentation to the losing registrar if requested." > > A simple web hosting agreement that doesn't even have a notion > of apparent authority wouldn't be enough to allow the web hosting company to > act on behalf of the customer. The Admin and Technical contacts are not of > any particular significance. They would only be accorded authority if the > agreements gave the registrar a grant of authority. > > Ordinarily, the losing and gaining registrar must structure > their processes to comply with the contracts. Many registrars provide that > the Administrative Contact has authority, so they generally ask the > Administrative Contact if the transfer request is valid. They are only fit > within the context of the registration agreements. The policy, which is > embodied in the agreement between the Registrar and Registry provide that > the form of authorization shall be at the discretion of the gaining > registrar, but that there must be express authorization from an individual > with apparent authority. This depends on what the registration agreement > between the losing Registrar and Registrant. > > Express Authorization: Section to be further developed. > > Summary on Apparent Authority > > Some have raised the argument that what constitutes 'apparent > authority' is inappropriately defined within the context of existing policy. > As a result, a small minority of registrars are withholding transfers or > requiring burdensome verification from registrants. This has led to > complaints from registrants, from gaining and losing registrars, and > resulting in confusion on what processes are needed to effect authorized, > competitive transfers. > > The Task Force suggests that, after further examination, that apparent > authority is a well-defined legal concept and the lack of specific > definition within the relevant body of ICANN policy should not be a barrier > to the work of this task force to make policy recommendations. > > The discourse concerning the definition of apparent authority has been > productive, as this particular discussion has raised the level of awareness > of a number of related issues including EPP Auth Codes, the form of express > authorization and the roles that losing and gaining registrars play in the > domain name transfer process, as well as identifying confusion which may > result on the part of the registrant in dealing with variant rules and > processes across different registrars. > > Additionally, the TF considers the following two recommendations: > > Further, the task force should ensure that the policy > recommendation provides that the form of authorization is available for > inspection by parties to the transfer transaction and that unauthorized > transfers can be expediently reversed with no expense of liability to the > losing registrar or the registrant. > > Lastly, the task force will also seek to identify and make > appropriate recommendations concerning the recourse that a gaining registrar > and/or registrant have at their disposal in instances when the reason for > denying a transfer given by a losing registrar is in dispute. > > Further work on Express Authorization will be undertaken and then > incorporated into a final version of this draft document. > > The task force recommends further work and discussion is needed on express > authorization, specifically: > > The Task Force will seek to better document and understand the experience of > different registrants, and will ask registrars for summary illustrations of > their experiences with denied or failed transfer requests to support this > aspect of activity of the TF. > > It also remains to be identified whether adequate safeguards are in place, > and whether policy guidelines are needed to ensure that the Gaining > Registrar has received express authorization from an individual with the > apparent authority to undertake the transfer. > > The Task Force, as a preliminary comment, notes that examples of > what constitutes express authorization and the manner in which an individual > with apparent authority can provide it to a registrar, keeping in mind the > roles that intermediate suppliers play in transfer transactions would be > helpful to identify in the agreements provided between registrant and > intermediary, or registrant and registrar. > > > > > > > > nc-transfers-draftingwg-appauth-v0r0d6-051402.doc |