At Enter To Win, we appreciate different points of view, so today we have a guest on our blog. This post was written by and is copyright Eric Swetsky, and originally appeared in his Advertising & Marketing Law newsletter.
Ask yourself this – why is a formal set of “rules” necessary when running a contest? Your answer probably relates to complying with the law. Actually, that’s only half the answer.
Without question, the law requires that certain features form part of a contest, and that they be publicized. For example, you cannot give a prize away by chance alone (such as drawing a name out of a hat). There also has to be a skill component so that the contest is a game of “mixed chance and skill.” That’s why a skill-testing question forms part of most contests conducted in Canada.
The other purpose behind contest rules is to protect the sponsor of the contest. A good example of this is the “Kraft case.” In the U.S., Kraft ran a contest in which participants had to match the “left half” of a minivan found in specially marked packages of Kraft cheese with the “right half” of the minivan that appeared in Sunday newspapers. A “match” meant that you won the minivan.
Instead of a single winner of a $17,000 minivan, enough matching pieces were mistakenly distributed to make about 10,000 people winners. You can guess the rest. Kraft eventually settled the matter by distributing $10 million in cash and product coupons, both for the minivan prize and other lesser prizes (bicycles, skate boards, etc.) that also had more winning game pieces mistakenly distributed than originally contemplated.
As a result of the Kraft case, any “scratch & win” contest today contains a “printing” rule. It says that should printing or any other type of production irregularities occur with the Scratch cards and if, as a result, prize claims exceed the number of prizes available to be won, a random draw will be made from amongst all those making a prize claim to award the total number of prizes stated in the rules as available to be won. The “Kraft” rule has one goal – to protect the Sponsor.
Another example of contest rules protecting the sponsor of the contest relates to on-line entries. What happens if the server goes down two days before the end of the contest? Usually, the rules for an on-line contest covers this by stating that if you cannot complete the contest because of technical problems, the draw will be made from among those entries already received.
The message: A set of contest rules ensures that the Sponsor not only complies with the law, but also provides it with protection against contest crises that can easily happen.
Eric Swetsky is a Toronto lawyer who practices advertising, marketing, trademark and copyright law. His website is advertisinglawyer.ca.