Many businesses may run online competitions on social media to boost consumer engagement and business visibility. These online competitions or otherwise known as trade promotion competitions must satisfy three elements – they must be free to enter, promote a good or service and be conducted by a registered business. However, when businesses are running these competitions it is imperative to have clear, well constructed terms and conditions. Having an easily accessible and comprehensible terms and conditions will protect both regulators and entrants from possible future legal issues. In order to formulate a clear terms and conditions there are several factors that need to be covered and addressed. Read on to find out what they are.
The terms and conditions needs to clearly state who is eligible to enter the competition. Important factors to consider may be their age; do entrants need to be over 18 to enter the competition or can they be younger? Furthermore the geographical boundaries of the competition needs to be made clear. Is the competition only within Australia or does it extend worldwide? An eligibility clause should also address whether employees of the business running the competition can enter as well. These are just a handful of the important eligibility requirements that needs to be considered when creating a terms and conditions.
A competition time frame needs to be provided to entrants so they know when it opens and closes. It should also be specified to entrants about when the winner of the competition will be revealed. Hence, it is important for the competition regulators to consider how long they wish to give entrants to enter the competition.
Picking the winner
There are two ways an online competition can run. These are a Game of Chance or a Game of Skill.
A Game of Chance involves entrants being selected by complete chance. Hence, winners may be selected by a random computer generator or a name slip in a hat. Either way, it needs to be chance which dictates the winner of the competition. In NSW, in order to run a Game of Chance competition a business needs to apply for a permit which you can do on Service NSW.
A Game of Skill is based on an entrant’s talent and skill. For example, such competitions may require entrants to submit an art work or essay to win the competition after an assessment by a judge/s. Unlike a Game of Chance, businesses do not need to obtain a permit for a Game of Skill.
The terms and conditions should include an intellectual property clause. This may outline that although the entrant may hold all the necessary intellectual property rights, it may be used by the business for promotional purposes. If you need further legal advice in regards to this clause, a patent lawyer will be able to assist you.
It may be beneficial to also include a clause about disqualifying entrants from the competition. This may be due to them breaching any of the terms and conditions or conducting in unlawful behaviour to have a greater chance of winning the competition.
The terms and conditions should also outline what the prize of the competition is. In cases where the winner needs to provide identification to receive the prize, this should be specified in the terms and conditions to avoid future complications.
For more specific legal guidance about terms and conditions for an online competition speak to a consumer lawyer today.
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