We’ve seen this scenario (one too) many times before: the business/marketing team comes to the in-house legal team and wants to run a sweepstakes or contest to promote a brand or a new product line. Surprise! They are hoping to launch it as soon as possible – maybe even tomorrow. But in the request to the legal team for approval, details are sparse, and it isn’t clear exactly what the business team intends to do.
In case you’re faced with an “emergency” like the one described above, this blog post is intended to provide a quick tool kit for in-house lawyers to keep things on track by asking the following questions:
Questions for Business Team |
Our Comments |
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| 1. | Is there already an Official Rules document that has been drafted or is in progress? | If an Official Rules document is in progress, it might contain many of the answers to questions #2-12 below. So, if one exists, ask the business team to share it. If one doesn’t exist, obtaining answers to questions #2-12 will allow the Official Rules document to be drafted quickly with minimal back and forth. |
| 2. | Are we working with an agency or influencers on this promotion? | If yes, task who the third parties are and whether agreements are in place with them. Has the Legal Department already reviewed those agreements? If not, request copies of them. |
| 3. | Will the winner(s) be selected via a random drawing, or will there be a skill-based element involved? | If winners will be selected by a random drawing, it is important to make sure that no “consideration” is required to enter. That is, participants should not be required to contribute anything of significant value to enter the promotion, unless there is also an alternative (free) method of entry. If the winners will be selected by skill (e.g., a contest with judges), then it will be important for the Official Rules to clearly define the judging criteria. |
| 4. | How will entries be collected, and how many entries can each participant submit? | Will a website be set up that allows participants to submit entries? If so, what is the web address? Or will entries be collected on social media platforms and if so, which ones? It will be particularly important to comply with social media platform rules which are important, and to specify in the Official Rules how many entries are allowed per person. |
| 5. | What prize(s) will be given away in the promotion, and how much are they valued at?
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If the total value of all prizes exceeds $5,000 you may also be required to register and bond the promotion with various state agencies (NY/FL) up to thirty days before the promotion begins. If this is the case and there is a time crunch, workarounds may be needed such as reducing the total prize value or excluding NY/FL from the promotion. |
| 6. | Who can enter the promotion? | Is eligibility limited to the public aged 18+? If not, additional issues may be raised when (A) opening eligibility to those under 18; (B) limiting eligibility to a certain group (e.g., industry participants). In these cases, more nuanced review will be needed. |
| 7. | Where will the promotion be run? | Is eligibility limited to US residents only, in all 50 states? If not, which state(s) are excluded? Additional issues are raised when expanding eligibility to non-US residents; ensuring compliance with promotion laws outside the USA will be important. |
| 8. | When can participants enter the promotion? | The team will need to provide both the start and end dates of the promotion so that information can be placed in the Official Rules document. Which time zone will control? |
| 9. | When will the winner(s) be selected? | Typically, it is fine to say that winner(s) will be chosen within a reasonable time frame after the end of the promotion if the business team doesn’t want to provide an exact date. However, this will need to be specified in the Official Rules. |
| 10. | How will the winner(s) be contacted? | Will contact occur via social media, direct message, email, phone, or some combination of the three? How long will the winner(s) have to respond to those communications? |
| 11. | Will we advertise the promotion online, or on social media? | If the answer is yes, the Legal Department will need to provide “short form” rules that include key promotion details, and ensure that the promotion complies with various social media “platform” rules. |
| 12. | Where will we post the Official Rules? | The Official Rules should be easily accessible and viewable to participants. For example, if the promotion will have a website to collect entries, we recommend posting the Official Rules there. |
Keep in mind that promotions can be nuanced, so the above questions are not an exhaustive list. However, asking the business team to provide the above information can help expedite the legal review process, minimize correspondence between in-house and outside counsel, and put the legal team in a position to draft or revise an Official Rules document quickly. For more details on the items and concepts mentioned above, check out our more in-depth blogs here, here, and here. And of course, our team at Faegre Drinker is ready to assist with any of your promotions needs (including drafting Official Rules pronto!).
The material contained in this communication is informational, general in nature and does not constitute legal advice. The material contained in this communication should not be relied upon or used without consulting a lawyer to consider your specific circumstances. This communication was published on the date specified and may not include any changes in the topics, laws, rules or regulations covered. Receipt of this communication does not establish an attorney-client relationship. In some jurisdictions, this communication may be considered attorney advertising.
