Over the past few years, we have seen an increased number of our clients (both brands and agencies) participate in contests and other type of promotions in which a third party is responsible for most of the marketing and administration.
Some examples include franchisors engaging franchisees to conduct most of a promotion, major brands partnering with influencers and brands partnering with other co-sponsors or prize sponsors.
In many cases, one party, either the franchisor, major brand or a co-sponsor, is interested in participating in a contest or promotion (e.g., contributing some prizing or intellectual property assets, such as their name or marks), but wants another party (or parties) to conduct most of the marketing and administration.
Considering the risk of partnering with third parties (particularly, smaller companies or potentially less sophisticated individuals, such as influencers), we have been increasingly asked by our clients to prepare agreements to mitigate liability from third-party conduct.
Co-Sponsor and Influencer Agreements
(Contests and Other Promotions)
Some of the types of agreements that we have helped our clients with relating to contests and promotions include co-sponsor agreements, contest indemnity agreements and influencer agreements.
While the substance of each agreement differs according to the parties involved and the type of promotion, many agreements that we have prepared include common types of provisions.
These provisions include covenants setting out the obligations of the parties (i.e., responsibilities of the parties, including for marketing, administration and contribution of prizes), description of the promotion (including timelines and how it will be marketed), use of names, marks and other intellectual property, compliance with relevant laws (e.g., Canadian anti-spam law (CASL), misleading advertising laws and rules relating to influencer marketing, particularly disclosure of material connections), indemnification provisions and sponsor rights to review third-party advertising and creative material before being published or posted.
In addition to helping parties shift risk, these agreements also allow parties to participate in a contest or promotion with limited involvement (e.g., by only contributing some prize or use of their name, marks or other IP), while still realizing marketing value.
Such arrangements (and agreements) can also be, and in our experience are, replicated to be used for other promotions with different co-sponsors, prize sponsors, influencers or other marketing partners.
List Agreements
(Sharing E-mail Lists Under CASL)
A related topic is list agreements. While it is far less common now to buy third-party e-mail lists since Canadian anti-spam law (CASL) came into force in 2014, a number of our clients collect consent on behalf of third parties (e.g., marketing partners, sponsors, etc.). In many cases, this is relatively straightforward under CASL for identified third parties (i.e., where the identities of the third parties are known). In this regard, CASL includes rules for collecting consent on behalf of identified third parties (which require, among other things, identifying who is requesting consent on behalf of whom and prescribed identification information for the third parties).
Under CASL, consent to send commercial electronic messages (CEMs) can also be collected on behalf of unidentified third parties. However, given that there are a number of obligations imposed on the collecting party under section 10(2) of CASL and the Regulations (e.g., to “ensure” that any authorized third parties include CASL-compliant unsubscribes as well as reciprocal notification obligations if a recipient unsubscribes), it is often advisable for the collecting party to also enter into list agreements with third parties on whose behalf they collect consent.
Such agreements both help collecting parties comply with the specific obligations under CASL for collecting consent on behalf of unidentified third parties and may also provide evidence of due diligence in the event of an investigation.
In addition, companies and others sharing e-mail lists with third parties should be aware that under section 9 of CASL, liability is not limited to senders of e-mails, but also to those who “aid, induce, procure or cause to be procured the doing of any act” that violates section 6 (the unsolicited CEMs section of CASL).
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If your company or brand is planning to run a contest or other promotion involving co-sponsors, prize sponsors, influencers or other marketing partners and wants to mitigate potential risk through a co-sponsor/influencer agreement (or other type of agreement), contact us: Contact. We can also assist with list sharing arrangements and list agreements under CASL.
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SERVICES AND CONTACT
I am a Toronto competition/antitrust lawyer and advertising/marketing lawyer who helps clients in Toronto, Canada and the US practically navigate Canada’s advertising and marketing laws and offers Canadian advertising/marketing law services in relation to print, online, new media, social media and e-mail marketing.
My Canadian advertising/marketing law services include advice in relation to: anti-spam legislation (CASL); Competition Bureau complaints; the general misleading advertising provisions of the federal Competition Act; Internet, new media and social media advertising and marketing; promotional contests (sweepstakes); and sales and promotions. I also provide advice relating to specific types of advertising issues, including performance claims, testimonials, disclaimers, drip pricing, astroturfing and native advertising.
For more information about my services, see: services
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