Contest checklist to help you with your next promotion and making sure you have all the bases covered and are in compliance with the law pursuant to the Competition Bureau of Canada and the Criminal Code of Canada.
Contest Rules Checklist (& Contest Rules Template)
Contest and promotion in Canada are governed by the Competition Act and the Criminal code. Section 74.06 of the Competition Act relates to false or misleading representations and deceptive marketing practices. Section 206 of the Criminal Code deals with the no purchase requirement of contest and the requirement to have a skill testing question. Any contest rules template should ensure that the basic minimum requirements are met by both legislations. You can read more on the Competition Bureau’s website which is summarized below.
Promotional contests are governed by the Competition Act and note the following:
74.06 A person engages in reviewable conduct who, for the purpose of promoting, directly or indirectly, the supply or use of a product, or for the purpose of promoting, directly or indirectly, any business interest, conducts any contest, lottery, game of chance or skill, or mixed chance and skill, or otherwise disposes of any product or other benefit by any mode of chance, skill or mixed chance and skill whatever, where
(a) adequate and fair disclosure is not made of the number and approximate value of the prizes, of the area or areas to which they relate and of any fact within the knowledge of the person that affects materially the chances of winning;
(b) distribution of the prizes is unduly delayed; or
(c) selection of participants or distribution of prizes is not made on the basis of skill or on a random basis in any area to which prizes have been allocated.
In summary, Section 74.06 of the Competition Act prohibits any promotional contest that does not disclose:
- the number and approximate value of prizes
- the area or areas to which they relate
- any other information relating to the chance of winning such as the odds of winning
- the distribution of prizes cannot be unduly delayed
- selection of participants or prizes awarded/distributed on the basis of skill or on a random basis,
The Competition Act also requires that there be “adequate and fair disclosure” of the contest rules. This requires the following:
- the entrant should not be inconvenienced in any way to have to commit to the advertiser’s product or contest
- the entrant should not have to obtain further details and the contest rules should be clear and conspicuous
- the entrant should not have to visit a retail outlet, franchise or dealer to enter a contest or become aware of the contest rules
Adequate disclosure in the contest rules template should be made for the following (and are included in the Contest Rules Template):
- Prize Value – Section 74.06(a) of the Competition Act provides for disclosure of the “approximate” value of the prizes meaning the approximate market value (and in the case of a trip where it difficult to determine the value with exact precision, a few representative examples would suffice).
- Regional allocation – any regional allocation of prizes such as whether in the atlantic provinces or Quebec should be disclosed.
- Chance of Winning – if a total number of prizes are known in any production run, then this affects the chances of winning and must be disclosed.
- Series of prizes – if prizes are awarded at different times, then this must be disclosed.
- Early Bird Prizes – if certain prizes are only awarded to the first entrants, then it imust be disclosed.
- Disclosure at point of sale – disclosure of a short list of contest rules must be made on any specially-marked packages when the contest involved such products. The entrant should not have to purchase a product to be familiar with the contest rules. The short list disclosure of rules includes:
- the number and value of prizes
- any regional allocation of prizes
- the skill testing requirement
- details as to the chances of winning
- contest closing date
- any other facts that materially affect the chances of winning.
Section 206 of the Criminal Code, in relation to lotteries and games of chance, prohibits the purchase of a product or service as a condition in participating in the contest. The section notes:
“Everyone is guilty of an indictable offence and liable to imprisonment for a term not exceeding two years who (…) (f) disposes of any goods, wares or merchandise by any game of chance or mixed chance and skill in which the contestant or competitor pays money or other valuable consideration; (…)
Games of pure chance are prohibited as illegal lotteries under the Criminal Code. There is why a skill testing question is required in all Canadian contests. This section requires that a contest must have an element of skill involved and a winner cannot be chosen randomly alone (unlike in the US). Most contests permit a four part mathematical skill testing question. The Criminal code prohibits games of chance or mixed chance and skill where a purchase is required to win a prize. Although the Competition Act permits winners to be determined on the basis of either skill or by chance, Section 206(1)(a) to (d) of the Criminal Code prohibits the conduct of contest in which winners are determined solely by chance.
A person that violates section 74.06 of the Competition Act may be subject to being ordered not to engage in such conduct, publish a corrective notice and/or pay an administrative penalty up to $750,000 (for an individual) and up to $10,000,000 (for corporations). Subsequent vioaltions are increased to $1,000,000 (individuals) and $15,000,000 (for corporations).
General Contest Checklist (for Contest Rules Template)
1) Official Contest/Promotion Name
2) Contest Start Date (including exact time, date, time zone)
3) Contest Close Date (including exact time, date, time zone)
4) Contest Eligibility (geographical restrictions)
5) Language/Territories – Does it include Quebec? English? French?
6) Name of Contest Sponsor and Sponsor’s address
8) Administrator’s Address
Number of Entries and How to Enter the Contest
9) Method of Entry to contest (random draw? skill testing contest? game? competition? Facebook and/or Twitter entry methods?) Is it tell a friend? Will the Contest be promoted on Facebook? Twitter? Any bonus entries?
10) Number of entries and any restrictions on the number of entries?
11) Information Required for Registration into the Contest/Promotion
12) Release/Waiver and address where Release Forms Should Be Sent To
13) How many days does an entrant have to return a declaration and release?
Prizes, Selection & Restrictions
14) Prizes (including Grand Prize, Secondary Prize, etc. and the number and approximate retail value of all prizes)
15) Grand Prize Restrictions (age requirements, flight departure and return dates, blackout dates, number of guests permitted, length of hotel stay, what government ID and travel documents are required, what expenses are or are not covered such as transportation, transfers, food, beverages, taxes, tips or gratuities). Ensure you add a date indicating when the prizes will be distributed.
16) Prize Winner Selection and Notification Details:1) When can we contact the winner?2) How many days does a potential winner have to contact the contest administrators?
Contest and Sweepstakes Draw
17) If there is a draw, how many times will a draw be redone if we can’t determine a potential winner the previous attempts?
Odds of Winning
18) Describe the odds of winning each prize.
19) Confirm No Purchase Requirement
Skill Testing Question
20) Description of skill testing question. Ensure you have added a skill testing question
21) Confirm that entrant will abide by all applicable laws including privacy policies and that the use of entry information from entrants will only be used for the purpose of the contest administration unless they have specifically and clearly opted in in writing.
22) Abbreviated rules
Contest Rules Template Download
Download a sample contest rules template here.