Holding competitions can be a great opportunity for brand exposure, but you need to ensure you have well-drafted, comprehensive Competition/Prize Terms and Conditions to ensure the competition entrants are aware of their obligations and the rights and responsibilities of your business.
Competition Terms and Conditions apply to the operation of a competition where entrants of the competition agree, as a condition of entry, to the terms of the entity holding the competition.
The Terms and Conditions outline the key aspects of the competition including eligibility of entry, the prize, how to enter, any special conditions of entry, when and how the competition winner(s) will be announced, among other things.
There are generally two types of competitions:
Games of chance don’t require entrants to demonstrate any level of skill and an entrant wins purely by chance. An example of this is where winners are drawn at random.
Games of skill require an element of skill to win the competition and usually has a judge or panel of judges to choose the winner. An example of this is a competition requiring entrants to submit an answer to a question in 25 words or less. This requires the entrant to use a degree of skill to win the competition.
Competitions that are considered games of chance must comply with the laws of the state or territory in which the competition is being held that relate to those types of competitions. If a competition is held Australia-wide then it must comply with the relevant Laws and regulations of every state and territory.
Also, for chance-based competitions most states require you to hold a permit to conduct the competition. With an application to obtain a permit you must provide your competition terms and conditions to the government, which is why having competition terms and conditions in place is vital.
It’s also necessary to have terms and conditions for games of skill competitions. This also ensures all parties are aware of their rights and obligations.
See the below links for more information on whether you need a permit for your competition for each Australian state or territory:
You may choose to only have entrants as individuals over 18 years of age or you may have specific criteria of eligible entrants. If so, you should clearly state this in the terms and conditions.
Generally, employees and family of employees of the business holding the competition are excluded from entering the competition, so it’s a good idea to include this and any other exclusions in the terms as well.
You should also consider whether you permit entrants to submit an unlimited number of entries in the competition or if they are limited to one entry per person.
You should clearly outline how entrants enter the competition and any online forms or questions they need to answer in order to have a chance at winning.
It’s important to also include when the winner(s) will be announced.
The dates of when the competition starts and ends is necessary to include in the competition terms and conditions. This makes it clear to entrants when the cut off is for entering the competition.
The terms should include specific details of what prize or prizes are awarded to the winner(s) of the competition.
It’s necessary to include how the competition winner will be announced. Will the winner be contacted by phone or email? How will the winner be announced to the public?
Also, the terms should include provisions allowing for the scenario where the winner initially selected isn’t able to be contacted and that in the circumstance a new winner would be selected.
It’s a good idea to include in the terms that if an entrant is selected as the winner of the competition that they agree to be involved in promoting the competition, including being photographed and interviewed and that they agree that your business can use their name, image and likeness for the purpose of announcing the winner to the public and in any articles or social media posts promoting the competition.
You should consider including circumstances where you can disqualify an entrant if they breach the competition terms and conditions, such as cheating to win the competition by having an unfair advantage or if they act in a way that infringes a third party’s intellectual property (IP).
Disclaimers act to limit your business’ liability and they’re highly advantageous to include in your terms.
The following are a few examples of disclaimers that can be included in the terms:
Yes, competition terms and conditions are regulated by the Australian Competition and Consumer Commission (ACCC). This means that the rules of a competition must be written down and they must be published in a public document. The rules must be compliant with all applicable State Laws, and also the Australian Consumer Law, which protects consumers from misleading or deceptive conduct.
Australia has quite strict rules when it comes to running competitions and as such, there are a variety of regulatory requirements you need to consider. One of those is knowing whether or not you need to register your competition or obtain a permit.
If your competition is a ‘Game of Chance’ or a ‘Trade Promotion’ then you are likely to require a permit and register your competition. This type of competition can also be known as a sweepstake, which involves a random draw to pick the winner.
The permit or licence you require will depend on the value of your price and the state that your competition is running in.
Using a free competition terms and conditions template always comes with risk. This is regardless of whether you plan to make changes and customise the template to suit your competition.
The main reason you should avoid using a template is that terms and conditions are legal documents that need to be unique and specific to the competition you’re running and to your organisation.
Templates are not tailored to your competition or company in mind and may miss a variety of regulatory requirements that would protect your business. For this reason, it is strongly recommended to have your competition terms and conditions drafted by an experienced lawyer.
In Australia, raffles are considered gambling and each state and territory has different regulations and requirements. In New South Wales, a raffle can only be held to benefit a not-for-profit organisation or to raise funds for charity.
If the value of the prize(s) is less than $30,000, the raffle is classified as a ‘draw lottery’ and a permit may not be required. If the value of the prize(s) exceeds $30,000 then the raffle is classified as an ‘art union gaming activity’ and a permit is required.