buy-contest-form
twitterlinked-in
 

Alphabet

CANADIAN CONTEST RULES & FORMS

Need contest rules and forms for a Canadian Contest?: I offer a selection of Canadian contest rules and forms for common types of Canadian contests. For more information see: Contest Forms.

____________________

The following are some common contest, sweepstakes, lottery and promotions law and marketing terms.  For more advertising law terms see: Advertising Alphabet.  For competition/antitrust law terms see: Antitrust Alphabet.

Advisory opinion.

Under section 124.1 of the Competition Act, any person may apply to the Commissioner of Competition, together with supporting information, for a binding written opinion regarding the application of any provision of the Act.  Written opinions can be a practical way for businesses and individuals to reduce potential competition law liability for proposed conduct.  A written opinion is binding on the Commissioner if all material facts relating to the proposed conduct have been submitted.  If issued, written opinions remain binding for as long as the material facts on which they are based remain substantially unchanged and the conduct is carried out substantially as proposed.  Binding written opinions are available, subject to the Commissioner’s discretion to issue them, for proposed conduct only.  In other words, the Bureau will not issue advisory opinions for existing business conduct.

Written opinions are available under the following provisions of the Act, among others: resale price maintenance (section 76), exclusive dealing / tied selling / market restriction (77), abuse of dominance (79), civil agreements provision (90.1), conspiracy (45), misleading advertising and deceptive marketing practices (52, 55.1, 74.01, 74.06), deceptive telemarketing (52.1), deceptive prize notices (53), multi-level marketing and pyramid selling (55 and 55.1), performance claims (74.01(1)(b)) and promotional contests (74.06).

See Competition Act section 124.1; Competition Bureau, website, Legal Actions and Opinions section; Competition Bureau, Bulletin, Competition Bureau Fee and Service Standards Handbook for Written Opinions; definition of “written opinion”.

“Car or cash pitch”

A form of deceptive telemarketing.

Rachel Larable-Lesieur, Deputy Director of Investigation and Research, Marketing Practices Branch, Bureau of Competition Policy, “Modern Communications and Global Markets”, speech to the Canadian Institute Conference on Misleading Advertising (1995): “… victims are led to believe that they have won either a vehicle or money but to get their prize, they must release money up front to cover phony taxes, insurance or handling charges.”

“Cheap gift pitch”

A form of deceptive telemarketing.

Rachel Larable-Lesieur, Deputy Director of Investigation and Research, Marketing Practices Branch, Bureau of Competition Policy, “Modern Communications and Global Markets”, speech to the Canadian Institute Conference on Misleading Advertising (1995): “… victims are told they are winners of one of several prizes but in order to qualify for the prize, they need to purchase a cheap product at an inflated price.”

Contest.

Promotional contests in Canada are largely governed by the federal Competition Act (statutory disclosure and misleading advertising rules), federal Criminal Code (provisions governing “illegal lotteries” that must be avoided), federal and provincial privacy legislation (relating to the collection of entrant personal information), the common law of contract (contests have been held to be contracts) and intellectual property laws (e.g., relating to the transfer of original artistic materials, for example in skill contests, or reproduction of 3rd party logos, trade-marks or other intellectual property not owned by a contest organizer).  In addition, Quebec has a separate regime governing contests, regulated by the Régie des alcools, des courses et des jeux.

With respect to the Competition Act, subsection 74.06 makes it a reviewable (i.e., civil) matter, subject to civil penalties, to operate a contest without certain required disclosure, to unduly delay the award of prizes and also governs the selection of participants and distribution of prizes:

“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.”

Deceptive prize notice. 

Competition Bureau, Enforcement Guidelines, Application of the Competition Act to Representations on the Internet: “Subsection 53(1) of the [Competition Act] makes it an offence to send deceptive notices of prizes. A notice is deceptive where, among other things, there has not been adequate and fair disclosure of certain information, including facts which materially affect the chances of winning. The offence applies to sending the prize notification or causing it to be sent, whether ‘by electronic or regular mail or by any other means’. Further information on the Bureau’s policy with respect to section 53, can be found in the publication entitled Deceptive Notices of Winning a Prize – Section 53 of the Competition Act available on the Competition Bureau Web site.”

Due diligence defence.

The Competition Act contains pure criminal offences (i.e., requiring subjective intent, such as the criminal misleading advertising provision, section 52) and strict liability offences (i.e., where proof of carrying out the mere actus reus, or act elements, is sufficient to constitute an offence subject to a due diligence defense).  In this regard, due dligence defenses are available under the deceptive telemarketing (section 52.1), deceptive prize notice (section 53(1)) and multi-level marketing (section 55(1)) provisions of the Competition Act.

Competition Bureau, Bulletin, Corporate Compliance Programs (2010): “For certain false or misleading representations and deceptive marketing practices provisions under the Competition Act and certain provisions of the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act, a company may argue that it had exercised due diligence to prevent the conduct.  Although the pre-existence of a program is not, in and of itself, a defence to allegations of wrongdoing under any of the Acts, a credible and effective program may enable a business to demonstrate that it took reasonable steps to avoid contravening the law. In this regard, such a program may support a claim of due diligence. Documented evidence of corporate compliance will assist a company in advancing a defence of due diligence, where available.” … “The existence of a program does not immunize businesses or individuals from enforcement action by the Commissioner or from prosecution by the DPP.20 However, in determining the most appropriate means to resolve cases involving offences where the exercise of due diligence is a defence, the Commissioner may give weight to the pre-existence of a credible and effective program in making sentencing recommendations to the DPP. A program will be considered credible and effective where it can be demonstrated that it was reasonably designed, implemented and enforced in the circumstances.”

Foreign Lottery Schemes.

Canadian Department of Justice, Report of the Canada – United States Working Group on Telemarketing Fraud (Updated December 1, 2011): “Telemarketers offer victims the opportunity to “invest” in tickets in well-known foreign lotteries (e.g., Canada or Australia), or give them a ‘one in six’ chance of winning a substantial prize.  This is a common cross-border offence, since it plays upon the ignorance of victims of the rules (or even the existence) of foreign lotteries.  If offenders purport to sell real lottery chances but deceive victims about their chances of winning, it may be both a gambling offence and fraud; if real chances are sold without deception, it may still be a gambling offence.”

Illegal lottery.

In addition to the standalone promotional contest provision in the federal Competition Act (section 74.06), criminal illegal lottery provisions of the federal Criminal Code also apply to contests in Canada (sections 206 and 207).  These provisions prohibit certain types of gaming activities unless an exemption is available or one or more elements of the relevant offence is removed.  While the relevant provisions of the Code are complex and somewhat archaic, they generally codify, although inconsistently, the former common law elements for illegal lotteries: (i) a prize, (ii) chance and (iii) consideration.

Re: Earth Future Lottery: “… Parliament does not happily abide gaming activities of any sort in Canada.  The little it tolerates, it does so grudgingly.  Section 206 [of the Criminal Code] is prohibitive in nature, not regulatory.  The purpose of Parliament in enacting it was generally to outlaw gaming and lotteries, not just to ensure they would be run honestly.  Subsection 206(1) creates a number of indictable offences proscribing a comprehensive range of gaming and gaming-related activities.  Subsection 206(4) makes it a summary conviction offence to buy, take or receive a lot, ticket, other device mentioned in 206(1).  Although s. 207 allows some tightly circumscribed exceptions to s. 206, it too contains a broad prohibition.  Subsection 207(3) makes it an offence to do anything for the purpose of the conduct, management, operation of, or participation in a lottery scheme unless the doing of it is authorized by or pursuant to some provision of 207.  Thus, even permitted lotteries must strictly adhere to the limits imposed by the terms and conditions of s. 207.”

Canadian Better Business Bureau, BBB Code of Advertising: “No contest, drawing or other game of chance that involves the three elements of prize, chance and consideration should be conducted since it constitutes a lottery [under the federal Criminal Code] and is in violation of provincial statutes.”

Instant win contest.

A type of contest in which entrants are immediately notified whether they have won (as opposed to, for example, waiting for notification by e-mail, phone or mail).

Insured contest.

An “insured contest” is a contest in which a contest promoter has obtained insurance to cover the, usually remote, possibility that a winner wins a significant prize where the odds of winning are significant (i.e., in which it is unlikely that any entrant will win).

Misleading advertising.

Competition Bureau, Ensuring Truth in Advertising, Misleading Advertising and Labelling: “The misleading advertising and labelling provisions enforced by the Competition Bureau prohibit making any deceptive representations for the purpose of promoting a product or a business interest, and encourage the provision of sufficient information to allow consumers to make informed choices.  The false or misleading representations and deceptive marketing practices provisions of the Competition Act contain a general prohibition against materially false or misleading representations. They also prohibit making performance representations which are not based on adequate and proper tests, misleading warranties and guarantees, false or misleading ordinary selling price representations, untrue, misleading or unauthorized use of tests and testimonials, bait and switch selling, double ticketing and the sale of a product above its advertised price. Further, the promotional contest provisions prohibit contests that do not disclose required information.  The Consumer Packaging and Labelling Act, Textile Labelling Act and Precious Metals Marking Act all contain prohibitions regarding false or misleading representations. They also require certain labelling or marking information aimed at assisting consumers in making informed purchasing decisions.”

R. v. David Stucky, 2006 CanLII 41523 (Ont. S.C.): “The essential elements of the [offence of misleading advertising under section 52 of the Competition Act] pre- and post-amendment, are: (a) that representations were made; (b) for the purpose of promoting, directly or indirectly the business interest specified in the indictment; (c) to the public; (d) the representations were false or misleading; (e) in a material respect.”

“Prize-pitch”, “Prize-promotion”, “Gimme Gift” or “Cheap Gift” Schemes.

Canadian Anti-Fraud Centre: “One of the most common scams is the “prize pitch”. Consumers are told they have been specially selected to win a prize, or have been awarded one of three or two of five prizes. These prizes usually include cash or a vehicle. You must purchase a product and pay in advance to receive your prize. These products may include “coin collections”, personalized pen sets, etc. The products are generally cheap or overpriced, but may sound valuable over the phone.”

Canadian Department of Justice, Report of the Canada – United States Working Group on Telemarketing Fraud (Updated December 1, 2011): “Telemarketers ‘guarantee’ that the victims have won valuable prizes or gifts, such as vacations or automobiles, but require victims to submit one or more payments for non-existent shipping, taxes, customs or bonding fees, or anything else the offender thinks plausible.  Some schemes never provide their victims with any prize or gift, while others provide inexpensive items, often called ‘gimme gifts’ by U.S. telemarketers and ‘cheap gifts’ by Canadian telemarketers.”

RCMP, Prize Pitch (Lottery) Scams:  “The classic prize pitch scam involves victims receiving notification by post, phone, or e-mail indicating they have won a prize (monetary or other valued item).  However, in order to collect the prize the victim is required to pay various fees or taxes in advance. Victims either never hear from the organization again or receive further requests for money.  If you have won a prize in Canada there are no fees or taxes to be paid.”

Promotional Contest.

Promotional contests in Canada are largely governed by the federal Competition Act (statutory disclosure and misleading advertising rules), federal Criminal Code (provisions governing “illegal lotteries” that must be avoided), federal and provincial privacy legislation (relating to the collection of entrant personal information), the common law of contract (contests have been held to be contracts) and intellectual property laws (e.g., relating to the transfer of original artistic materials, for example in skill contests, or reproduction of 3rd party logos, trade-marks or other intellectual property not owned by a contest organizer).  In addition, Quebec has a separate regime governing contests, regulated by the Régie des alcools, des courses et des jeux.

With respect to the Competition Act, subsection 74.06 makes it a reviewable (i.e., civil) matter, subject to civil penalties, to operate a contest without certain required disclosure, to unduly delay the award of prizes and also governs the selection of participants and distribution of prizes:

“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.”

Random or ‘random draw’ contest. 

Contests generally fall into two categories: skill contests (e.g., judged story-writing, photography or other skill competitions) and random contests (e.g., contests where winners are selected by random draw).  Random contests can include random draws, seeded games (e.g., where prizes may be found under bottle caps, etc.), scratch-and-win cards, instant win games online or so-called “match and win” games (in which participants collect game pieces for a game, puzzle, etc.).

A “random draw” type of contest is one in which winners are chosen by a random draw from all eligible entries received (as opposed to, for example, a skill contest, where a contest entrant may have to compete with other entrants to win prizes).

B. Pritchard & S. Vogt, Advertising and Marketing Law in Canada, 4th ed. (Toronto: LexisNexis, 2012): “Contests can be divided into two broad categories: skill contests and contests where prizes are awarded randomly.  Until recently, skill contests – where winners are selected by experienced judges based on the contestants’ skill at story-writing, photography, etc. – were much less common.  Contests where winners are chosen at random include: sweepstakes where prizes are awarded by random draw; seeded games (including Coke’s ‘under the bottle cap’ promotions and Tim Hortons’ ‘Roll Up The Rim To Win’), where prizes are randomly seeded on game cards or on-pack, and participants must scratch, unpeel or otherwise reveal the prize area to discover whether they have won a prize; online instant win games where consumers enter a code number (usually obtained on-pack); and ‘match and win’ games where participants must collect game pieces to spell specific words or match the pieces of a puzzle.”

Skill contest.

A type of contest in which winners are chosen by skill not chance.  In Canada, illegal lottery offences under the federal Criminal Code prohibit, among other things, awarding property by chance or awarding goods, wares or merchandise by chance or mixed skill and chance, where entrants pay to play (or provide other valuable consideration).  As such, pure skill contests can be one way to include a purchase requirement for a promotion without violating the Criminal Code.

U.S. Federal Trade Commission: “Skill contests [are] puzzles, games or other contests in which prizes are awarded based on skill, knowledge or talent – not on chance.  Contestants might be required to write a jingle, solve a puzzle or answer questions correctly to win.”

B. Pritchard & S. Vogt, Advertising and Marketing Law in Canada, 4th ed. (Toronto: LexisNexis, 2012): “Contests can be divided into two broad categories: skill contests and contests where prizes are awarded randomly.  Until recently, skill contests – where winners are selected by experienced judges based on the contestants’ skill at story-writing, photography, etc. – were much less common.  Contests where winners are chosen at random include: sweepstakes where prizes are awarded by random draw; seeded games (including Coke’s ‘under the bottle cap’ promotions and Tim Hortons’ ‘Roll Up The Rim To Win’), where prizes are randomly seeded on game cards or on-pack, and participants must scratch, unpeel or otherwise reveal the prize area to discover whether they have won a prize;  online instant win games where consumers enter a code number (usually obtained on-pack); and ‘match and win’ games where participants must collect game pieces to spell specific words or match the pieces of a puzzle.”

Skill testing question.

Skill testing questions are commonly included in promotional contests in Canada in an effort to remove the chance element from a contest.  This is because at common law, illegal lotteries were generally defined as consisting of three elements: (i) chance, (ii) consideration (i.e., typically a cash entry requirement) and (iii) a prize (which offences have been codified in the Federal Criminal Code).  As such, based on these illegal lotteries offences, many contest organizers will often elect to remove either the consideration element (e.g., by offering a “no purchase necessary” entry option), chance element (e.g., including a mathematical skill testing question requirement to win or making a contest entirely a skill-based promotion), or both.

Sweepstakes scam.

Canadian Anti-Fraud Centre: “After entering a fake sweepstakes contest in the mail, you will receive a call within two to four weeks from a fraudulent telemarketer. This person will usually identify themselves as a lawyer, judge, customs agent or other official. They will represent themselves as an agent for a particular company. You will be told that you have won a large cash award, but money must be sent up front for taxes, etc.”

Twisted text prize.

Consumer Protection BC, “Top Ten Scams 2013 – Just in case a scam is around the corner”: “You receive a text message.  When you open it, you are surprised by a message informing you that you’ve won a major retailer’s gift card.  You just need to go to a website and enter a PIN, and the card is yours.  You are asked to enter the PIN and an email address.  Then, you are taken to a form and instructed to fill out your name, cell number, mailing address and answer unrelated personal questions, such as ‘Are you interested in going back to school?’ and ‘Are you diabetic?’ When you reach the page to ‘claim your gift card,’ you instead find yourself directed to another site to apply for a credit card.  In the end, you never receive a credit card and you have given out personal information.”

Winner release form.

A winner release form is commonly one of several documents used for the operation of promotional contests in Canada (and other countries), together with short rules (mandatory point-of-purchase disclosure) and long rules (containing the more detailed entry and eligibility requirements for the contest).  A winner release form commonly includes a declaration by the entrant of contact information, age, residency status, compliance and comprehension with the rules of the contest, no relationship with the contest sponsor and various releases depending on the nature of the contest – for example, to accept the prize as awarded, be responsible for any taxes associated with the prize awarded, release the sponsor from liability and, for promotional contests involving the creation of original material (i.e., skill contests involving the judging of artwork, video, or other talent exercises) transferring rights to the original material to the sponsor and granting the sponsor the right to use and reproduce it.

Written opinion.

Under section 124.1 of the Competition Act, any person may apply to the Commissioner of Competition, together with supporting information, for a binding written opinion regarding the application of any provision of the Act.  Written opinions can be a practical way for businesses and individuals to reduce potential competition law liability for proposed conduct.  A written opinion is binding on the Commissioner if all material facts relating to the proposed conduct have been submitted.  If issued, written opinions remain binding for as long as the material facts on which they are based remain substantially unchanged and the conduct is carried out substantially as proposed.  Binding written opinions are available, subject to the Commissioner’s discretion to issue them, for proposed conduct only.  In other words, the Bureau will not issue advisory opinions for existing business conduct.

Written opinions are available under the following provisions of the Act, among others: resale price maintenance (section 76), exclusive dealing / tied selling / market restriction (77), abuse of dominance (79), civil agreements provision (90.1), conspiracy (45), misleading advertising and deceptive marketing practices (52, 55.1, 74.01, 74.06), deceptive telemarketing (52.1), deceptive prize notices (53), multi-level marketing and pyramid selling (55 and 55.1), performance claims (74.01(1)(b)) and promotional contests (74.06).

See Competition Act section 124.1; Competition Bureau, website, Legal Actions and Opinions section; Competition Bureau, Bulletin, Competition Bureau Fee and Service Standards Handbook for Written Opinions; definition of “advisory opinion”.

____________________

SERVICES

Contest Law

I offer a full range of Canadian contest legal services for compliance with the Competition Act, Criminal Code and other relevant laws.  My services include: preparing contests to comply with relevant federal laws, drafting short and long contest rules and statutory disclosure, reviewing promotional contest marketing and advertising materials for Canadian advertising law compliance and winner releases.

Advertising Law

I help clients practically navigate Canada’s advertising and marketing laws and offer Canadian advertising law services in relation to print, online, new media, social media and e-mail marketing.

My Canadian advertising law services include advice in relation to: anti-spam legislation (CASL); Competition Bureau complaints; the general misleading advertising provisions of the Competition Act; Internet, new media and social media advertising and marketing; promotional contests (sweepstakes); and sales and promotions. I also provide advice relating to specific types of advertising issues, including performance claims, testimonials, disclaimers and native advertising.

Competition Law

I offer business and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, Internet and new media law and contest law.  I also offer competition and regulatory law compliance, education and policy services to companies, trade and professional associations and government agencies.

My experience includes counseling clients on the application of Canadian competition and regulatory laws and I have worked on hundreds of domestic and cross-border competition, advertising and marketing, promotional contest (sweepstakes), conspiracy (cartel), abuse of dominance, compliance, refusal to deal, pricing and distribution, Investment Canada Act and merger matters.

To contact me about a potential legal matter: contact.