CANADIAN CONTEST RULES/PRECEDENTS
Do you need contest rules/precedents
for a Canadian contest?
We offer many types of Canadian contest/sweepstakes law precedents and forms (i.e., Canadian contest/sweepstakes law precedents to run common types of contests in Canada). These include precedents for random draw contests (i.e., where winners are chosen by random draw), skill contests (e.g., essay, photo or other types of contests where entrants submit content that is judged to enter the contest or for additional entries), trip contests and more. Also available are individual Canadian contest/sweepstakes precedents, including short rules (“mini-rules”), long rules, winner releases and a Canadian contest law checklist. For more information or to order, see: Canadian Contest Law Forms/Precedents. If you would like to discuss legal advice in relation to your contest or other promotion, contact us: Contact.
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One of my practice areas is Canadian advertising and marketing law. In this respect, I have worked on a number of “destination marketing” promotions over the past few years, including for hotel, resort and Canadian and international government clients. “Destination marketing” involves promoting travel to a hotel, resort, province/territory or country.
In this regard, many tourist destinations advertise or run promotions – whether via the Internet, social media or more traditional media – to market their brands and commonly regional partners (e.g., hotels, resorts, airlines, travel agencies or prize sponsors).
In working in this area, primarily assisting clients prepare and promote destination marketing related contests, a few points have arisen that destination marketers may consider from a Canadian advertising/marketing law perspective.
These include:
Prizes and Prize Substitution
For destination marketing involving contests and trip prizes, a number of issues can arise relating to the awarding of trips (e.g., issues relating to travel, dates, health, being able to afford to travel, etc.).
As such, destination marketing sponsors are well advised to ensure that their terms and conditions describe in detail what is included, what happens if a prize cannot be awarded (or a winner cannot travel) and reserving control by the sponsor over prize selection, award and substitution.
Winner Releases For Trip Contests
Destinations commonly run contests where winners are awarded trips to the destination. As with contests generally, it is generally important to have winners sign releases and, in the case of trip contests, winner and companion releases.
Such releases often include terms stating that the winners have complied with all terms and conditions, release the sponsor (and any partners) from liability and indemnify the sponsor(s) in the event the winner breaches any of the promotion’s rules.
Canadian Anti-spam Law (CASL)
Canada’s federal anti-spam legislation (CASL) is often relevant when running contests in Canada, including if electronic distribution lists will be used to market the contest, the contest will include the collection of e-mails for marketing unrelated to administration of the contest, if entrants’ e-mail addresses will be shared with third parties (e.g., related entities or affiliate marketers) or entrants can “share” the contest with friends or family for additional entries.
Given the potentially severe penalties for violating CASL, which include administrative penalties of up to CDN $10 million, it is important for contest sponsors to ensure that they comply with CASL for electronic marketing related to promotional contests open to Canadians.
For more information about contests and CASL, see: Contests and CASL and CASL Compliance Errors. For CASL checklists and precedents that we offer for sale, see: CASL Checklists and Precedents.
Co-sponsor Agreements
Destination marketing promotions often involve multiple parties who are participating and have an interest in the promotion. This may include the destination itself, prize partners, co-sponsors and affiliate marketers.
One key consideration for destinations is to consider the ability of partners in the promotion to comply with relevant laws and, if there is a question (and often simply routinely), to have agreements with partners to protect the destination in the event something goes wrong.
Co-sponsor agreements commonly include provisions in which partners agree that they will comply with relevant laws, rights for the sponsor if they don’t and indemnification provisions to shift risk. The nice thing about co-sponsor agreements is that once in place for one promotion, they can often be re-used or adapted for other promotions.
Professional Entrants / Sponsor Control
Destination marketing promotions often include very impressive/valuable prizes (often spiffy trips to the destination). Unfortunately, professional entrants sometimes attempt to game a promotion.
Some tips include retaining significant control for the promoter/sponsor over the operation of the promotion (e.g., internal decisions about qualification), ensuring that there are clear rules giving the sponsor the right to determine who may participate, technological safeguards where entrants may attempt to automate their entries (e.g., using captchas for online entries / voting contests and IT personnel that can detect and disqualify non-qualifying entrants, automated entries, etc.
Important Additional Co-sponsor Terms
It is common for co-sponsors (e.g., travel companies, partners providing prizes, etc.) to request that terms and conditions be included relating to their participation.
In general, it is a good practice to clearly include these in the main terms and conditions for the promotion before launch. Like advertising in general in Canada, material terms in a destination marketing promotion (e.g., restrictions on prize awards) should be clearly stated upfront.
Social Media Marketing
Destination marketers, like brands generally, are increasingly using the web and social media to market their promotions. As with other types of promotions, most social media platforms (e.g., Facebook, Instagram, Pinterest, Twitter, LinkedIn, etc.) have specific terms of use for using their sites for a promotion.
As such, the terms of use for the particular social sites should be reviewed before launching a destination promotion and required language / disclaimers be included in the promotion’s terms.
Co-sponsor Marketing
In some promotions, co-sponsors may ask or require that they be able to participate in post-promotion marketing. This may involve, for example, the collection of e-mail addresses for use by one or all of the sponsors. Sponsors should be aware that Canadian privacy and anti-spam law (CASL) impose specific requirements relating to the collection and use of personal information and consent and other requirements to use e-mail addresses post-promotion.
Potential issues include where one sponsor collects e-mail addresses that are shared with and improperly used by a co-sponsor or inadequate disclosure of co-sponsors that will be using e-mail addresses.
Some practical considerations for sponsors include understanding who they are co-sponsoring with (and their co-sponsor’s ability and willingness to comply with relevant laws) and whether they should have a co-sponsor agreement to cover off risk in the event a marketing partner violates anti-spam, privacy, misleading advertising or other rules.
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KEY LEGAL TIPS FOR RUNNING
A PROMOTIONAL CONTEST IN CANADA
The following are some key legal tips for operating a successful and legal contest in Canada:
CRIMINAL CODE
Avoid the illegal lottery offences of the Criminal Code (e.g., include a bona fide “no purchase necessary” entry option and skill element, such as a time-limited, multiple-step mathematical question for potential winners as a condition of awarding prizes).
SHORT RULES (MINI RULES)
Include short rules / mini rules with all of the required Competition Act disclosure requirements for point-of-purchase materials (e.g., print and in-store marketing, social media and Internet sites, packaging and labeling, television and radio spots, etc.).
For more information, see: Canadian Contest Law Forms/Precedents.
LONG RULES (OFFICIAL RULES)
Ensure that precise long rules (i.e., the official contest rules) are included that reflect the details of the contest, anticipate potential contingencies (e.g., technical problems) and set out the terms of the contest as clearly as possible – for example, eligibility requirements, how to enter, prize descriptions, number and value of prizes, draws and award of prizes, odds of winning and indemnifying and releasing the contest sponsor and any co-sponsors or prize sponsors.
Contests are contracts, and so they should be as accurate, clear and precise as possible in the event issues arise.
For more information, see: Canadian Contest Law Forms/Precedents.
WINNER RELEASE FORMS
Consider using winner release forms for contest winners.
While not required by law in Canada, winner release forms are almost always used by contest sponsors to have winners confirm that they have complied with all contest rules and release the sponsor from legal liability. Signing and returning winner releases is also commonly included in contest rules as a condition of awarding a prize.
Winner release forms are particularly important for contests in which there may be higher risk (e.g., where the contest involves high value prizes or a trip prize).
For trip contests, sponsors are generally advised to use winner releases for both winners and any travel companions (and guardian releases for any minor companions).
For more information, see: Canadian Contest Law Forms/Precedents.
FALSE OR MISLEADING ADVERTISING
Ensure that advertising and marketing materials are not false or misleading (i.e., comply with the general civil and criminal misleading advertising sections of the Competition Act, under sections 74.01 and 52).
In this regard, contests in Canada must comply not only with stand-alone contest provisions of the Competition Act (under section 74.06) but also with the general misleading advertising sections of the Competition Act.
It is particularly important to ensure that the marketing materials also match the contest rules and that all material aspects of the contest (e.g., number and type of prizes, prize values, how to enter and win and any conditions/limitations) are accurately described in the short rules, long rules and marketing materials.
CANADIAN FEDERAL ANTI-SPAM LAW (CASL)
Comply with Canada’s federal anti-spam legislation (CASL).
CASL is often relevant when running contests in Canada, including if electronic distribution lists will be used to market the contest, the contest will include the collection of e-mails for marketing unrelated to administration of the contest, if entrants’ e-mail addresses will be shared with third parties (e.g., related entities or affiliate marketers) or entrants are either required or incentivized (e.g., through additional entries) to “share” the contest with friends or family.
Given the potentially severe penalties for violating CASL, which include AMPs of up to CDN $10 million, it is very important for contest sponsors to ensure that they comply with CASL for any electronic marketing related to promotional contests open to Canadians.
For more information about contests and CASL, see: Contests and CASL and CASL Compliance Errors.
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CASL Compliance Checklists and Precedents: For information about the CASL compliance checklists and precedents we offer, see: CASL Compliance Checklists and Precedents.
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INTELLECTUAL PROPERTY CONSENTS
Consider whether consents are needed (and if necessary obtained) to reproduce third-party intellectual property – for example, trade-marks, logos, etc. – or to transfer ownership in contest materials – for example, where contestants create original material as part of the contest.
Contest rules in Canada commonly include rights (e.g., a licence) for the sponsor to use information and content contributed by entrants and if entrants will be contributing original content (e.g., photographs, essays, etc.) it is also a good practice for sponsors to include guidelines relating to their rights to use (or reject) any entrant contributed content.
For more information, see: Guidelines for Consumer Generated Content Contests.
U.S. LEGAL ADVICE IF OPEN IN THE U.S.
Obtain U.S. legal advice if the contest will be open to U.S. residents or limit the contest to only Canadian residents.
SOCIAL MEDIA PLATFORM RULES
Comply with social media sites’ terms of use if using social media to promote or host a contest (e.g., Facebook’s Promotions Rules).
Also ensure that appropriate disclosures are made in all social media marketing (i.e., include short rules).
For more information, see: Contests and Social Media.
OTHER COMPETITION LAW
AND ADVERTISING LAW RULES
Consider whether other competition or advertising law rules may apply to a contest. For example, in addition to the stand-alone contest provision (section 74.06), the Competition Act also contains provisions governing deceptive prize notices, general misleading advertising (sections 52 and 74.01) and telemarketing that involves prizes.
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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
To contact me about a potential legal matter, see: contact
For more regulatory law updates follow me on Twitter: @CanadaAttorney
