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If you are running a trade promotion competition, it is important that you have clear terms and conditions that comply with the: 

  • Australian Consumer Law; and
  • applicable state regulations. 

It is also important to comply with these laws and regulations when you apply for permits. This is because the regulator will require you to submit your terms and conditions first in order to get the permit. This article will discuss some of the key requirements that you should consider including in your terms and conditions before launching your competition. 

Who Can Enter?

It is important that you specify clearly who can enter the competition. 

For example, you may intend on limiting the competition to residents of New South Wales who are over 18 or Australian residents rather than opening it up to the international market. 

If you wish to limit who can enter the competition, it is important that you include this limitation clearly in your terms and conditions. While it is important to specify who can enter the competition, it can also be important to specify who cannot enter the competition. 

For example, often businesses want to exclude employees and immediate family members from being able to enter. If this is the case, this must be included in the terms and conditions.

It is also recommended that there be a clause stating that entry into the competition means that the entrant warrants that the competitor meets the entry eligibility requirements and accepts these terms and conditions.

How Can You Enter?

It is important to be specific in your terms and conditions about how entries can be submitted. For example, you may be able to enter the competition by accessing a particular website link and filling in a form or submitting an answer to a question via a particular social media page. 

Whatever the requirements are, all steps should be clearly outlined in the terms and conditions so that entrants can easily follow the instructions. You should also outline: 

  • the number of entries allowed per person; and 
  • how the winners will be chosen.

For example, you should explain if the winner will be chosen by a draw or whether there is a criteria that will be followed in order to choose the best entrant. 

You may reasonably suspect unlawful or improper conduct. Therefore, your terms and conditions should also include a right for you to disqualify any entrants. Such improper conduct can include: 

  • infringing a third party’s intellectual property rights; or
  • a breach of the competition terms and conditions.

What Are the Important Dates?

It is important that you clearly identify when the: 

  • competition starts; 
  • submissions will close including date and time; and
  • winner will be announced. 

If there is a draw, the date and location of the draw must be included. Different states have different requirements concerning when the draw must take place. In Queensland, the draw must be held in Australia and within 12 months of the commencement date of the promotion. In New South Wales and Australian Capital Territory, it must take place within 12 months of the date on which the permit is issued. This must be followed unless permitted by the relevant regulator. Further, in Western Australia, the draw must be conducted within one month of the closure date for entries to a promotion.

Costs and Expenses

It should be made clear in your terms and conditions that the entrants are responsible for any and all expenses that they incur in entering or winning the competition. Further, your terms and conditions should state that they will not be reimbursed regardless of whether or not they win the competition.

For example, if the competition prize is tickets to a concert in Melbourne and the winner lives in Sydney, it should be made clear that the prize does not include travel or accommodation costs. 

Privacy

It is likely you will be collecting personal information for the competition. Therefore, you need to ensure that you are handling any personal information in a matter that is compliant with the Australian Privacy Principles. You should: 

  • have a privacy policy in place; and 
  • refer the entrants to this privacy policy.

Notification

The terms and conditions must outline how you will notify winners if they are successful.

Each state has its own requirements in relation to notifications of winners of competitions. In NSW you must notify the winner of a draw after two days after the draw, personally by:

  • face-to-face 
  • mail; or 
  • email  

Further, it is not enough to merely try to notify the winner. You must make every reasonable effort to locate and notify the winner.

The winner must also be published on the relevant forum consistent with the manner in which the promotion is conducted. 

For example, if the entry into the competition was through Facebook, the details of the winner should be published on Facebook. 

This notice should remain on the website or platform for a certain number of days. If you are unsure of the notice requirements for your state, it may be best to seek legal advice.

Prize Requirements

Depending on where you are running your competition, prizes must be delivered within a specific time period. In any event, your terms and conditions should specify how and when the prize will be delivered. 

Further, you must clearly state that the prize is ‘not transferrable’ and ‘not redeemable for cash’. This is so a winner cannot transfer a prize to another person. Further, they cannot request cash in exchange for the prize.

There may be situations where you are not the supplier of the prize. If this is the case, you should state that the prizes are subject to conditions imposed by the particular supplier or organiser. This will prevent individuals from taking possible legal actions against you. In addition, you may require identification upon collection of the prize. If this is so, you should state this in the terms and conditions.

Key Takeaways

Preparing terms and conditions for your competition can be tricky. Depending on the value of your prizes and the type of competition you wish to run (for example, whether it is a game of skill or chance), there may be a number of different state and federal laws that must you must abide by. There may also be permit requirements that you should be aware of. If you have questions about running a trade promotion competition and are unsure about how to draft your competition terms and conditions, contact LegalVision’s competition lawyers on 1300 544 755 or fill out the form on this page.

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