To be used when a business is conducting a prize draw. This agreement sets out the terms that the draw will be conducted under, entry criteria and any exclusions or restrictions.
Prize Draw Terms/ Competition (Notice Conditions)
You should consider the following:
- Is the prize draw being conducted by the company or by a third party on the company’s behalf? If so, does the third party have their own terms that entrants would need to agree to? If yes they may need to be hyperlinked or appended to these terms.
- Are there to be any restrictions or exclusions? Will there be a minimum age limit? Will employees be excluded from entering? Will there be a limit on the amount of times someone can enter?
- Does the prize provider have any terms that need to be considered?
- Who will be responsible for delivering the prize?
- Who will deal with any enquiries relating to the prize?
- Are there any special terms that need to be included?
Legal Briefing Note: PRIZE DRAWS AND COMPETITIONS
There are various pieces of legislation or regulatory codes that govern prize draws and competitions. The main ones are as follows:
(1) The Gambling Act 2005 (regulates commercial gambling in GB)
- Gambling Act 2005 – defines and differentiates: lotteries; betting; and gaming but skill competitions and free prize draws are outside the Act.
- It would be preferable that you try to call them ‘prize draws’ where possible as opposed to ‘competitions’ as there are many rules governing ‘competitions’ e.g. Competitions can be deemed to be illegal lotteries unless skill is required –
- skill test:
- deter a significant proportion of potential participants from entering or
- prevent a significant proportion of entrants from receiving a prize
- multi stage
- audience relevance
- skill test:
- If no skill, it’s a lottery (and unlawful unless licensed or exempt) if participants:
- pay money
- pay for goods or services at a price or rate that reflects the opportunity to enter the lottery but if cost of goods is not increased a promotion will be lawful
- transfer money’s worth
(2) Betting, Games, Lotteries & Amusements (Northern Ireland) Order 1985 (as amended)
This is applicable but has less to say than (1) so, choosing the standards laid down in the legislation at (1) would be your best bet.
(3) Consumer Protection from Unfair Trading Regulations 2008 (EU)
These Regulations contain a ban on “unfair” or “misleading” commercial practices – a commercial practice will be misleading if it contains false information or its overall presentation deceives or is likely to deceive the average consumer (or material information has been omitted, hidden or provided in an unclear manner) and, as a result, this causes the average consumer to take a transactional decision they would not have otherwise taken.
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