Sweepstakes and Contests: Drafting Rules and Procedures to Avoid Liability and Loss

Description

An ever-increasing number of companies are using sweepstakes, contests, and similar promotions to attract customers. The phrase "no purchase necessary to win" – that is, the potential to get free stuff - dances in the heads of consumers, and there are many websites devoted to identifying opportunities to win free prizes. Attorneys lie in wait for these consumers, and other entrants, to detect noncompliance with applicable law and are more than willing to start a "litigation sweepstakes" of their own.

Contests and sweepstakes are subject to both state and federal law. Counsel must understand unfair generic trade or consumer protection statutes, a specific statute on contests, or even common law contract or fraud theories. Some plaintiffs challenge the legality of promotions, claiming them to be illegal lotteries.

To implement legally compliant sweepstakes or contests, a company must draft rules, make those rules available, and comply with those rules. Further, the company must ensure that all of its materials (not just the rules) make required references and disclosures. Detailed steps concerning receiving and selecting entries must be implemented and followed. A contest that unintentionally ends with multiple winners, even without any apparent violation of rules, exposes a company to legal risk.

Listen as this panel of experienced contest and sweepstakes attorneys provides detailed guidance as to the right and wrong ways to implement these useful marketing tools.