canadian contest law & practice and the cma’s updated ... · taming the contest beast...

Taming the Contest BeastCanadian Contest Law & Practice

and the CMA’s updated Guide to Promotional Contests, 2018

Bill Hearn, PartnerFogler, Rubinoff LLP

Webinar for Canadian Marketing Association December 13, 2018

OVERVIEW• Introduction

Contest Stakes, Concepts and Disasters CMA’s updated Guide to Promotional Contests, 2018

• Canadian Contest Law – The Basics Criminal Code - Contest Design Competition Act - Contest Disclosures An Act respecting lotteries, publicity contests and amusement machines – Contests

in Quebec• Other Contest Rules and Best Practices – Online, Mobile, Social Media and Global • Laws of General Application

Deceptive Advertising, Consumer Protection, Privacy, Anti-Spam, Intellectual Property and French Language

• Managing Contest Risks By Contracts and Other Means• Key Takeaways

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INTRODUCTION

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STARTING POINT

• Primary objectives are usually to sell products and services, build brand/customer awareness, drive traffic to stores/events/websites/platforms, get data and develop consumer databases …

• Creative is King!

• But don’t give short shrift to legal compliance

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STAKES ARE HIGH

• United States: Pepsi – “Play for a Billion Dollars” Sweepstakes, 2003

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CONCEPTS ARE VARIED

• Canada: Win a Baby*, 2011• Fertility treatment procedure prize (ARV $35K)

* Baby may not be exactly as shown.

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DISASTERS HAPPEN

• Mooing Milk Carton, 1991 - Bomb scare shut down Toronto Eaton Centre

• Hold Your Wee for a Wii, 2007 - Female contestant died of water intoxication

• Eat Bugs for Balls, 2012 – Male contestant died after eating worms and roaches

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APRIL FOOL’S?

• Win a “100 Grand”, 2005• Win a “Toyota”, 2001• Win a “Hummer”, 2005

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CANADIAN CONTEST LAW –THE BASICS

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CRIMINAL CODE –CONTEST DESIGN

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CONTEST DESIGNKey provision is section 206 of Criminal Code

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CONTEST DESIGN

Criminal Code prohibitions

206. (1) Every one is guilty of an indictable offence and liable to imprisonment for a term not exceeding two years who … (f) disposes of any goods, wares or merchandise by any game of chance or any game of mixed chance and skill in which the contestant or competitor pays money or other valuable consideration

[In general there are three essential elements to an illegal lottery:(1) a prize, (2) awarded by chance, (3) in a game where entrants pay money or otherwise give consideration to play.]

This section is basis for: Skill-testing question requirement (STQ) Use of free alternative mode of entry (AMOE)

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WHAT IS A GAME OF MIXED CHANCE AND SKILL?

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“CRANE GAME” CASE, 2002• R v. Balance Group International Trading

Ltd., [2002] OJ No 94 (ONCA)

• Issue: Whether the goods, wares, or merchandise were disposed of by means of a game of mixed chance and skill or a game of pure skill

• Held: Game of mixed chance and skill While a game of pure skill may

contain “some unpredictable elements,” the average player must be able to exercise sufficient skill to compensate for the element of chance

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“CRANE GAME” CASE, 2002How Ontario court defined “game of pure skill” – R. v. Balance Group International Trading Ltd., Ontario CA, 2002

• The crane game is a game “of mixed skill and chance with an overwhelming degree of chance and merely a dash of skill” - conviction upheld, $50 fine – criminal record, costs, 2 years in court Average player simply could not exercise sufficient skill to compensate for the other elements

of the game that were wholly beyond the power of the player to influence The ability of the player to control the crane’s lateral movement gave the appearance of an

element of skill … but there were too may other variables far more important than the positioning of the crane that would overcome what little skill the operator might bring to the game

Just because some elements of the game are out of the control of the player does not make the game one of mixed chance and skill … but it is not a game of pure skill where virtually all of the elements of the game are out of the control of the player

This was not a case where there were some unpredictable elements that might occasionally defeat the player’s skill, but the systematic resort to chance

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“GOT SKILL GAME” CASE, 2018

• Play for Fun Studios Inc. v. Registrar of Alcohol, Gaming, and Racing, [2018] ONSC 5190

• Issue: Whether it is a “game of skill” or a “game of mixed chance and skill”

• Held: Game of skill ... [T]he player who has enough

skill can “beat” the machine, so the machine cannot “defeat the ability of the player to obtain favourable results”

Decision under appeal

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SKILL TESTING QUESTION (STQ)

STQ• Sections 206(1)(a) to (d) prohibit schemes for disposing of property by “any mode

of chance”• Supreme Court of Canada has clarified that only games of “pure chance” are

prohibited• A proper STQ converts a game of pure chance into a game of mixed chance and

skill• 4-step (multi-operation) grade-6 level math question is usually sufficient skill test for

adults

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ASKING STQ

STQ - Must be Reasonable and Fairly Asked - Ranger v. Herbert A. Watts Ltd., Ontario High Court, 1970• Contest sponsor has duties:

to ask “reasonable” STQ to ensure the test is conducted with “essential fairness” to contestant to include

at least− reasonable advance notice− prior communication of the rules for the test− a means whereby contest judge can discover contestant is in reasonable

condition to engage in test− conducting the test fairly in the circumstances

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ANSWERING STQ

STQ - Being Answered Correctly, on Time and Without Assistance• Unclear whether placing the math STQ on entry form is acceptable but likely okay if

completed immediately and placed in ballot box at place where it was obtained – this works for traditional in-store paper entry form contest

• If math STQ to be included as part of online entry process, consider imposing time restrictions and advising entrant not to use the assistance of other people or calculators because there is case law that the question is not a skill test if the entrant has as much assistance as desired and there is no time restriction

• Entrant should certify that they have complied with the contest rules

• Consider providing flexibility in contest rules for “2nd chance STQ”

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FORCING A PURCHASE?

Charging a Fee to Play/Forcing a Purchase?

• Fees can be charged where: The contest is one of “pure skill” – e.g., a juried photo contest or dance

competition The prize is not “goods, wares or merchandise” (e.g., money or service prize) …

but be wary of relying on this argument

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NO PURCHASE OR CONSIDERATION?

No Purchase/Consideration Necessary?• Does a free website contest involve a “purchase/consideration” requirement in the

form of Internet access fees? Probably “no” as free Internet access and free email addresses are so widely

available in Canada

• Do text message fees constitute a “purchase/consideration” requirement? It depends. Possibly “no” based on fee being nominal and paid to 3rd party mobile

services provider (akin to postage stamp for mail-in AMOE). But US case law has held that premium text message fees for entering contests (where entrants are charged a fee in addition to the standard text message fee) are payments

• No Canadian case law on these questions so risk averse contest sponsors often still include free mail-in AMOE. But generally accepted that purchase of stamp is not offside – largely because of minimal cost and that payment is not made to contest sponsor; can be argued that same approach should apply to online and text entries

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NO PURCHASE OR CONSIDERATION?

No Purchase/Consideration Necessary?

• A contest open to spectators at a particular event (e.g., a hockey game) where payment is required to enter does not run afoul the no-purchase requirement provided the contest is not promoted outside the event. That`s because payment for the game ticket was not made in order to enter the contest

• Likewise, a contest open to only to the holders of a certain credit card where a fee is required for the card does not run afoul the no-purchase requirement provided the eligible entrants are limited to those who had cards prior to the contest start date. Again, that`s because the purchase of the card would not have been made in order to enter the contest

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What constitutes “other consideration”?

• Contestant giving up something of value to them, – e.g., their personal information (if used other than to administer the contest), their time and/or opinions through a “substantial effort” (e.g., to complete a lengthy survey, study product information, sit through a sales pitch/product demonstration, navigate through a website)

• Arguably, the consideration need not be of value to sponsor, but if it is, then even more difficult for sponsor to contend it is not consideration – e.g., 50-word essay requirement in AMOE should not be on a topic that the sponsor intends to use for market research or future advertising

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NO PURCHASE OR CONSIDERATION?

“FREE” ALTERNATIVE MODE OF ENTRY (AMOE)

Free AMOE and the “equal integrity principle”

• “Equal integrity” refers to notion that all entrants should be treated equally

• Term appears in no reported Canadian case but prominent in many US judgements –especially those dealing with online contests where online participants enjoyed a distinct advantage over their off-line counterparts

• Problems may arise when an advantage – in the form of a superior method of entry or better odds – is associated with a purchase or provision of other consideration

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“FREE” ALTERNATIVE MODE OF ENTRY (AMOE)

The “free” AMOE and equal integrity principle – R. v Brennan, Alberta Provincial Court, 1995 and Court of Appeal, 1996

• Case considered legality of contest promoting sale of book of poetry• While a single ticket for the contest was available without purchase upon request, the

trial judge found that there was a “reluctance” to give free tickets; everything was geared to the giving of five tickets on the purchase of the book

• As a result, the “no purchase” method provided no defence and accused was found guilty of violating section 206(1)(f) of Criminal Code

• Court of Appeal, orally and without reasons, set aside the conviction• The trial court decision suggests that the free AMOE may lose its efficacy if disparities

in treatment become too glaring• Contest sponsors should still attempt, where possible, to minimize disparities in

treatment between paying and non-paying entrants

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CRIMINAL CODE SANCTIONS

Sanctions Indictable offence punishable by imprisonment for a term not exceeding two

yearsor

Summary conviction offence punishable by a fine not exceeding $25,000

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COMPETITION ACT –CONTEST DISCLOSURES

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CONTEST DISCLOSURES

Key provision is section 74.06 of Competition Act

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CONTEST DISCLOSURES

Competition Act prohibits promotional contests that do not adequately and fairly disclose:− the number and approximate retail value of prizes− the area or areas to which they relate, and− any important information relating to the chances of winning, such as the

odds of winning and mechanics of contest(This is basis for full contest rules)

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DISCLOSURES

• All methods of making representations, including printed or broadcast advertisements, written or oral representations, audio-visual promotions and illustrations, are within the general scope of the Competition Act

• Compliance requires full contest rules being available for entrants and mini-rules in all contest advertisements

• Disclosure must be made:

In a reasonably conspicuous manner

Before the potential entrant is inconvenienced in some way or has committed to the contest or products being promoted by the contest

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MINI RULES FOR CONTESTS –SHORT FORM DISCLOSURE

• Re: “contest advertising”, the Competition Bureau’s 2009 enforcement guidelines state that all contest advertisements in every media should disclose “mini-rules” (as distinct from the full contest rules)

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MINI RULES – REQUIRED CONTENT

• Mini Rules must include: the number and approximate retail value of prizes any regional or other allocation of prizes the chances of winning the fact that no purchase is necessary the skill-testing question requirement any other fact known to the advertiser that materially affects the entrant’s

chances of winning the contest closing date where and how the full rules may be obtained

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MINI CONTEST RULES – WHERE?

Mini-Rules Disclosure in Ads• Packaging• Point-of-Sale• Billboards• Newspaper• TV• Radio• Internet• Wireless devices

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MINI CONTEST RULES - REQUIREMENTS

Mini-Rules Disclosure in Ads:

• Competition Bureau’s position on disclosure and fine print:

Must be large enough to be clearly visible and readable without resort to unusual means (e.g., magnifying glass)

Should never be smaller than 7 point font This is 7 point font.

On TV/radio should be comprehendible in one normal viewing/listening – e.g., sponsor can’t rely on possibility that potential entrant will view/hear the advertisement many times or being able to record and “freeze frame” it to have the time necessary to understand the disclosure.

− But this position may not make sense when the ad is shown only online and can be easily paused by the viewer

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SAMPLE MINI-RULES IN ADVERTISING ONLINE CONTESTS

* No purchase necessary. Odds of winning depend upon the number of eligible entries received, text charges may apply, limit one (1) entry per entrant, per person, per contest period, total of four (4) prizes available each consisting of 5 $100 Tim cards* representing the equivalent of one 14 oz coffee per day for 364 days approximate value $600 per prize, prizes awarded in the currency of the country in which the winner is ordinarily resident, correctly answered skill-testing question required for Canadian winners. Contest closes June 3, 2017. Complete contest rules available at telltimhortons.com or at participating restaurants ©Tim Hortons, 2017.

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COMPETITION BUREAU GUIDANCE

• Enforcement Guidelines on Promotional Contests, 2009

• Enforcement Guidelines on the Application of the Competition Act to Representations on the Internet, 2009

• Deceptive Marketing Practices Digests, 2015 to present

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COMPETITION BUREAU GUIDANCE

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COMPETITION BUREAU GUIDANCE

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DECEPTIVE PRIZE NOTICES• Key provision is section 53 of Competition Act

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DECEPTIVE PRIZE NOTICES

• It is a criminal offence for a person, in promoting a business interest or the supply of a product, to send a notice (by regular or electronic mail) giving the general impression that the recipient has won, will win, or will on doing a particular act win, a prize and if the recipient is asked to pay money or incur a cost – Section 53 of Competition Act

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DECEPTIVE PRIZE NOTICES

• No offence if recipient actually wins the prize and the person sending the notice:

Makes adequate disclosure of full contest rules

Distributes prize without unreasonable delay

Selects participants and distributes prizes randomly or on basis of participants’ skill

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DECEPTIVE PRIZE NOTICES

• Offence and punishment –

On conviction on indictment, to a fine in the discretion of the court and/or to jail for a term up to 14 years

On summary conviction, to a fine up to $200,000 and/or jail for a term up to one year

• Officers and directors in a position to direct or influence the policies of company regarding deceptive notice may be liable

• Due diligence defence exists – if person shows they exercised due diligence to prevent commission of offence.

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DECEPTIVE PRIZE NOTICES

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COMPETITION ACT PENALTIES(CIVIL)

Administrative Monetary Penalties (AMPs)

• Individuals: Up to $750,000 for the first offence Up to $1,000,000 for subsequent offences

• Corporations: Up to $10,000,000 for the first offence Up to $15,000,000 for subsequent offences

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COMPETITION ACT REMEDIES

• Competition Tribunal may:

Order restitution to victims of deceptive marketing practices

Freeze assets of accused business and prevent disposal of property before finding

• Interim order likely where accused is not a sizable and reputable business

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COMPETITION ACT REMEDIES

• Consumers (as individuals and, of greater concern, as a class may seek substantial damages in private court actions) alleging that the deceptive element of contest is a criminal offence under the Competition Act

• Even if only small compensatory damages for deceived contest entrant, punitive damages claim can be substantial

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CONSUMER PROTECTION REMEDIES

• See Richard v. Time Inc., Supreme Court of Canada, 2012

In context of Quebec Consumer Protection Act, compensatory damages of only $1,000 but punitive damages of $15,000 ($100,000 awarded at trial); also plaintiff awarded costs on solicitor-client basis so total value of judgement in $350K range; Time also had its own legal costs

• Also costs to contest sponsor’s business and brand with loss of consumer trust and bad PR associated with deceptive advertising

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CONSUMER PROTECTION REMEDIES

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An Act respecting lotteries, publicity contests and amusement machines –

CONTESTS IN QUEBEC

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QUEBEC’S SPECIAL CONTEST LAWS

Quebec is only province in Canada with own special contest laws, including provisions relating to contest advertising

These rules supplement those in the federal Criminal Code and Competition Act

Include filings of notifications, rules and reports with Quebec’s Régie des alcools, des courses et des jeux (Régie) and possible prize security requirement

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CONTESTS AND QUEBEC

Filing Thresholds

• If total prize pool is $100 or less (or contest for contest sponsor’s employees only): No need to file with Régie No need to abide by Régie’s rules No need to insert “Régie clause” into the rules

• If total prize pool is over $100 but under $2,000.01: File contest notice thirty days before contest launch (except if prize pool is under

$1,000, then file 5 days before launch) Pay duty upon filing notice No need to file contest rules or advertisements No need to submit report after contest completed

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CONTESTS AND QUEBEC

Filing Thresholds

• If total prize pool is $2,000.01 or more:

File notice with Régie 30 days before contest launch

Pay duty on filing notice

File contest rules and advertisements with Régie 10 days before contest launch

Complete and file with Régie written report with name, address and date of awarding the prize for each winner of a prize of $100 or more and verify whether all prizes have been delivered within 60 days of date winner is named

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CONTESTS AND QUEBEC

Duties for Prizes

• If Quebec is part of contest area within Canada, then duty is 3% of value of all prizes

• If Quebec is part of contest area that includes jurisdictions outside Canada, then duty is only 0.5% of value of all prizes

• If prizes specifically allocated to Quebec, then duty is 10% of value of those prizes

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CONTESTS AND QUEBEC

Security for Prizes

• A security bond must be filed with the Régie in the prescribed form if:

the value of prizes offered specifically to Quebec residents is over $5K or

the total value of all prizes (where Quebec is only part of the contest region) is $20K or more

• The Régie will send the bond form if applicable once the sponsor has filed the notice

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CONTESTS AND QUEBEC

Contest Rules

• Many requirements are similar to those under federal Competition Act but some differences – e.g.,

Must state the place, date and precise time prize winners will be named and the nature of skill testing question

Must state that sponsor and employees, agents etc. … and persons with whom they are domiciled are ineligible

Must contain the following clause (aka the “Régie Clause”):Any litigation respecting the conduct or organization of a publicity contest may be submitted to the Régie des alcools, des courses et des jeux for a ruling. Any litigation respecting the awarding of a prize may be submitted to the Régie only for the purpose of helping the parties reach a settlement.

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CONTESTS AND QUEBEC

Special Contest Advertising Requirements

• These include that all Quebec contest advertising must:

state the number, value and description of all prizes offered, or state that only one prize is available (if that`s the case), or specify the range of value (i.e., the smallest and the largest) of the prizes

state the nature of the STQ that an entrant must satisfy to claim a prize

not indicate that a person may win a prize when in fact all entrants receive the same prize – this is just a giveaway, not a contest

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CONTESTS AND QUEBEC

Implications for Contest Sponsors

• Quebec residents are sometimes excluded from Canadian contests because of the additional costs and constraints of complying with Quebec’s special contest laws

• Sponsor should be prepared to explain “why” to disgruntled Quebeckers

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OTHER CONTEST RULES AND BEST PRACTICES

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ONLINE

• Same general rules apply for online contests as for offline contests, but may have to be tailored – use common sense

• Competition Bureau has issued guidance for online contests• CMA Guide to Promotional Contests has summarized some of this guidance

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ONLINE

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MOBILE• Must comply with specific requirements for contests in the Canadian Wireless

Telecommunications Association’s Canadian Common Short Code Application Guidelines

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MOBILE• These Guidelines include special rules for Quebec

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SOCIAL MEDIA

>  Each platform has its own terms of use that must be adhered to or contest sponsor risks having its account suspended and content removed

>  These terms change frequently so always check for latest terms of use before launching contest on social media platform

>  CMA’s Guide to Promotional Contests summarizes special rules for contests on

• Facebook• Twitter• Instagram• Pinterest

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SOCIAL MEDIA

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GLOBAL CONTESTS - LOCAL LAW RISKS

• Since Internet is global, sponsor should specify who is eligible to enter and win, otherwise contest may be seen as open to everyone

• Moreover, sponsor may unwittingly violate laws in foreign jurisdictions that require contests to be pre-registered for a fee paid to the local contest regulatory body (as is required in Quebec). In the US, these jurisdictions include Florida, New York and Rhode Island. [Also the Canadian contest law STQ requirement is foreign to US law –in fact, can’t have STQ for US contestants]

• Other jurisdictions worldwide that have special contest rules include the UK, Australia, France, Germany and Turkey

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GLOBAL CONTESTS - LOCAL LAW RISKS

• If contest to include many jurisdictions around the world, then sponsor must determine where contest to be run and should obtain legal clearance/registrations (if applicable) in each jurisdiction

Should also specify time zone which applies to any deadlines established by the rules

• Key Takeaway - Sponsor should not “go global on a wing and a prayer”.

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GLOBAL CONTESTS - LOCAL LAW RISKS

• If only Canadian residents eligible, then include prominently on the contest home page and in the contest rules disclaimer along following lines:

THIS CONTEST IS OPEN TO CANADIAN RESIDENTS ONLY AND IS GOVERNED BY CANADIAN LAW

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CONTESTS AND LAWS OF

GENERAL APPLICATION

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CONSUMER PROTECTION FROM DECEPTIVE ADVERTISING

Federal Competition Act - False and Misleading Advertising

• Both civil (s.74.01) and criminal (s.52) provisions Contest and related advertising can’t be deceptive in a material respect Criminal provision applies where deceptive representation made “knowingly or

recklessly” No requirement that anyone actually be deceived

• “Enter to Win” vs “Enter for a chance to Win”or “Enter and you could Win”

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DECEPTIVE CONTEST ADS

Competition Bureau Enforcement Activity

• 2009 Consent Agreement with Elkhorn Ranch & Resort

Bureau investigation concluded Elkhorn had

− run contests in 2006 and 2007 without fair disclosure of accurate odds of winning and without ensuring winners were selected on a random basis

− given the misleading impression that the grand prize was a brand new SUV when the prize, if awarded, was only a one or two-year lease of an SUV with stringent conditions

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DECEPTIVE CONTEST ADS

Recent Competition Bureau Enforcement Activity

• 2009 Consent Agreement with Elkhorn Ranch & Resort

Elkhorn agreed to pay $170,000 for running misleading contests

Bureau press release stated:“When consumers enter a contest, they should have a reasonable chance of winning based on clear rules … If businesses run bogus contests to attract customers, they compromise the trust of consumers and hurt competition by gaining an unfair advantage over competitors operating legitimate contests”

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PROVINCIAL CONTEST AD LAWS (QUEBEC)

Special Contest Advertising Requirements

• These include that all Quebec contest advertising must:

state the number, value and description of all prizes offered, or state that only one prize is available (if that`s the case), or specify the range of value (i.e., the smallest and the largest) of the prizes

state the nature of the STQ that an entrant must satisfy to claim a prize

not indicate that a person may win a prize when in fact all entrants receive the same prize – this is just a giveaway, not a contest

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PRIVACY

> Contest sponsors must comply with federal privacy law (i.e., PIPEDA) or, where applicable, its “substantially similar” counterparts in BC, Alberta and Quebec

• Meaningful consent required to collect, use or disclose personal information (PI)• Consent may be implied for contest administration purposes• PI may be used only for purpose for which it has been collected• Should include appropriate privacy consent language in entry mechanism/form, contest

rules and winner’s declaration and release Key questions include:

− Does contest sponsor intend to use the PI collected for purposes other than administering the contest? If so, are the purposes “appropriate” and can “meaningful consent” be obtained?

− Does the contest sponsor intend to share PI with third parties and if so who and for what purposes?

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PRIVACY

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PRIVACY

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ANTI-SPAM

> Contest sponsors must comply with Canada’s Anti-Spam Legislation (CASL)

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ANTI-SPAM

Some key questions for contest sponsor:

• Will the contest be promoted by “commercial electronic message” (CEM)? • Does the contest sponsor have CASL consent to send CEM?• Does the CEM comply with CASL’s content requirements – i.e., sender identification

and unsubscribe?• Does a CASL exception apply?

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ANTI-SPAM

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INTELLECTUAL PROPERTY

> Copyright and Trade-marks

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FRENCH LANGUAGE (QUEBEC)

French Translation

• Régie does not require French translation for rules of contest held exclusively online

• French translation only required if contest sponsor is advertising in Quebec or making entry forms (other than online entry forms) available in Quebec

• Therefore possible to “register” with Régie without filing a French translation of such rules

• That said, the Office of the French Language (which administers the Charter of the French Language) still requires French translation

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FRENCH LANGUAGE (QUEBEC)

Charter of the French Language

Public signs, posters, point-of-sale materials and commercial advertising must be either exclusively in French or in French and another language, provided the French text is “markedly predominant”

“Markedly predominant” is the object of its own regulation under the Charter and is generally defined as “where the text in French has a much greater visual impact than the text in the other language”

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MANAGING CONTEST RISK BY CONTRACTS AND OTHER MEANS

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MANAGING CONTEST RISKS

Various Means

• Promotional Partnership Agreements (e.g., dealing with items such as contest administration, ownership of advertising material, protection of privacy and use of contest databases)

• Risk Management Processes and Products (e.g., risk awareness, communication, tracking and audit, prize security and insurance, draw adjudication, winner validation)

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MANAGING CONTEST RISKS

Various Means

• Entry Form (usually best place to get consent to use PI for purposes other than contest administration)

• Winners Declaration and Release (e.g., confirms in writing that winner has complied with contest rules, releases contest sponsor from liability associated with prize, confirms contest sponsor’s right to publicize winner’s information)

• Contest Rules (not just to comply with “adequate and fair” disclosure requirements mandated by contest law, but also to provide contractual protections for contest sponsor vis-à-vis contest entrants and winners)

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MANAGING CONTEST RISKS

Contest Rules – Contractual Protections

• All decisions of sponsor/independent judging organization are final and binding

• Sponsor reserves right to cancel or modify contest if it determines that contest can’t be run as originally planned or if fairness or integrity of contest compromised

• Sponsor may substitute prizes of equal value if original prizes can’t be awarded

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MANAGING CONTEST RISKS

Contest Rules – Contractual Protections

• If there are more potential winners than contemplated in contest rules, then there will be a draw amongst all eligible prize claimants after contest close date to award correct number of prizes (so-called “Kraft clause”)

• Other key clauses for rules include: glitch disclaimer (i.e., sponsor not responsible for damages and that contest may be cancelled/modified), eligibility (age and residency requirements); privacy consents (reiterate in entry form); and liability and publicity releases and indemnities (reiterate in winner’s declaration and release)

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KEY TAKEAWAYS

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SUMMARY

• Avoid common hazards … think contest through … what could go wrong

• Address regulatory concerns … federal Criminal Code, Competition Act, provincial laws (especially in Quebec)

• Address platform issues …

• Comply with laws of general application … truth in advertising laws

• Address contractual concerns … entry forms, rules, releases

• Skipping legal advice may be false economy

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QUESTIONS?

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CONTACT ME?

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Bill HearnPartner, Fogler Rubinoff LLP

bhearn@foglers.com416.941.8805

THANK YOU

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DISCLAIMERThis presentation contains general information only and does not constitute legal advice. Qualified legal counsel should be consulted to assess the application of laws to specific facts.

THANK YOU

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DISCLAIMER