Sweepstakes Rules: How Much Is Too Much?
William J. Shakespeare recognized over more than 400 years ago in As You Like It that, "Excess may do you harm." This may still hold true today for sweepstakes and contest Official Rules.
The internet has allowed Official Rules to be as long as a lawyer's imagination. But don't shoot yourself in the foot when you try to bulletproof your rules. Boilerplate language, "take it or leave" contracts and heavy-handed, one-sided provisions could be unconscionable and unenforceable. According to the New York Court of Appeals, "unconscionability … requires some showing of 'an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party.'" State v. Avco Fin. Servs. of N.Y., 50 N.Y.2d 383 (1980). Sounds like Official Rules.
Context is important. Contests with high-value prizes such as trips, cars, houses and large sums of money may warrant extended Official Rules, but consider whether long-winded rules are really needed when the prize is 10 packs of gum?
Clauses that should be given an extra look may include:
- Waiver of Personal Rights. Like Greta Garbo, entrants may want to be left alone. Compelling an entrant to allow her personal information, photograph, etc. to be publicized may go too far in a simple sweepstakes and may even be a form of illegal consideration.
- Sure, we all believe that arbitration will provide a quick resolution and may even shy entrants away from suing. But people who feel bulldozed by a lopsided arbitration clause may take it up with the courts. And even though courts favor arbitration, your arbitration clause could get thrown out because of the "large arbitration costs," Green Tree Fin. Corp. v. Randolph, 531 U.S. 79 (2002), or because of the significant distance a party may have to travel, Van Den Bogaerde v. Staub, 435 N.Y.S.2d 736 (1st Dep't 1981), or because the arbitration clause could not easily be found. Marek v. Alexander Laufer & Son, 683 N.Y.S.2d 50 (1st Dep't 1999).
- Limitation on Damages. Of course, you're willing to let them recover their out-of-pocket costs or obtain a new game piece, but having a provision which unreasonably favors one party could turn your rules into a contract of adhesion. Mannion v. Manor Care Inc., 2006 WL 6012873 (Pa. Com. Pl. Sept. 26, 2006).
- Release/Indemnification. Release clauses are good, but they can't be "too complicated or subtle for an ordinary layman to understand." Wheeler v. St. Joseph Hosp., 63 Cal. App.3d 345 (1976).
Practice Tips
- Use "You" instead of "Entrant" – it makes it more personable.
- Cut down on defined terms. The degree to which people feel the need to define every obvious term reminds me of when Chico and Groucho were going over a contract which read, "The party of the first part shall hereinafter be referred to as 'the party of the first part.'" As a lawyer, I know that trying to read a contract with multiple defined terms usually means having to page back to the "definitions" section many times. Imagine what those not admitted to the bar think while cursing every lawyer who had a hand in drafting the rules.
- Make arbitration and release language easy to find and easy to understand. You don't get extra points by finding 20 ways to say the word "claim."
- Use bullet points, charts or other methods to highlight complicated matters, such as an entry/winner selection schedule and submission requirements.
- Use bold or caps to highlight really important provisions.
- If there are multiple steps, number them.
- Make it easy for entrants to find the rules. You have to make sure the rules are readily presentable in order to form a binding contract with the entrant. Multiple clicks to get to the rules is frustrating; putting a link to the rules after the click to enter is a real no-no.
When drafting Official Rules, remember the words of Nietzche (the philosopher not the linebacker): "It is my ambition to say in ten sentences what others say in a whole book." (A perfect way to end a 700-word blog post on brevity!)
