A trade promotion competition is a free-entry competition conducted to promote goods or services supplied by a business. Trade promotion competitions are regulated at the state level and may or may not require the promoter to take out a permit. The application criteria differ depending on whether or not a permit is required. Having said that, a point of commonality amongst all Australian jurisdictions is that trade promotion applications must be accompanied by competition Terms and Conditions. Accordingly, the Terms and Conditions must be drafted in such a way as to meet even the most restrictive requirements of the state and territory jurisdictions. This is particularly the case where the competition is being hosted on a national or multi-state/territory level.
It is of paramount importance that the terms and conditions present a true, accurate and complete picture of the competition to be run. Towards this end, the document must clearly set out the following:
- conditions of entry and any eligibility requirements;
- the promotion period;
- closing date and time for entries;
- draw date(s) and method;
- full prize particulars, including the value of the prize;
- the method of claiming the prize;
- notification and publication particulars;
- transferability of prizes and exchanges (if permitted); and
- any other relevant factors.
Legality of the Competition
All promoters should review their Terms and Conditions to ensure that they comply with relevant state and territory laws. In particular, the promoter should ensure that no prohibited prizes are being awarded. Prohibited prizes include tobacco, firearms, ammunitions, weapons, dangerous articles, cosmetic surgery, certain liquor prizes and other goods and services the sale of which is an offence.
Certain entrants are also prohibited; Business directors, management, employees (including their immediate family members), retailers, suppliers, associated companies and agencies of the promoter cannot take part in the competition. This must be stated in the Terms and Conditions.
Prescribed Time Frames
The states and territories prescribe timeframes that must be adhered to when drawing the prize, allowing the prize to be redeemed, delivering the prize, publicising who the winner is, redrawing an unclaimed price, etc. Drafting Terms and Conditions that set out all the different prescribed time periods would make for a length and largely legalistic document. Neither of which are appealing to prospective competition entrants. A simpler way of going about the task is to simply include the strictest time frame provided by each jurisdiction and ensure that you abide by it even if your state allows for a more generous time period.
Trade promotion Terms and Conditions are an important thing to get right if you are planning on running a trade promotions competition. If you require your Terms and Conditions to be reviewed or drafted or if you would like assistance with taking out a trade promotion permit, contact our team of business lawyers to assist you with trade promotions.