Forfeit prizes, cancellation, deadlines, termination,
Stores closed, goods sold, how do we get through?
Test kits, verification, new prizes, isolation,
Entry dates, end dates, what can we do?
TV ads, full disclosure, vaccines, when’s it over?
Face masks, pick a winner, no more going out to dinner
Social distance, stay inside, can I win a new ride?
AMOE, applies to me, am I still a winner?
We did not start the fire, but it’s still burning. And for the foreseeable future, sponsors will want to pay special attention to how to handle currently running and upcoming planned sweepstakes and contests. Here are some thoughts.
Tips For Currently Running Promotions
Check the Official Rules: Read your rules to see if it’s feasible to run the promotion as planned or if you have a force majeure or similar clause providing a basis to cancel, suspend, or terminate the promotion.
The Force Majeure Clause. (Interestingly, this phrase, typically known as an “act of God,” is from the French and was used originally at the time of King Louis XIV who considered himself directly descended from God, which begs the question whether the Sun King needed a force majeure clause in any of his own documents). A typical force majeure clause may read:
“Sponsor reserves the right, in its sole discretion, to terminate, modify or suspend the Sweepstakes if, in Sponsor’s opinion, the Sweepstakes is not capable of running as planned by reason of … any other factors beyond Sponsor’s reasonable control corrupt or affect the administration, security, fairness, integrity, or proper conduct of the Sweepstakes.”
A court will generally uphold a force majeure clause if it specifically identifies the cause, that is, if in the […] portion above it identities a pandemic or the like. But the standard “any other factors beyond Sponsor’s reasonable control” should also likely cover a sponsor in the case of the coronavirus and a court would likely give a sponsor the discretion, as stated above, to "terminate, modify or suspend the Sweepstakes."
If your Official Rules do not contain a force majeure clause, a sponsor may still be able to suspend, modify or terminate a sweepstakes based upon the legal doctrines of impossibility or frustration of purpose, which may require a little more effort to prove.
Cancellation, Suspension, Modification or Termination? If your Rules give the sponsor the discretion to select any of these options, a sponsor will generally be protected no matter which it picks, so long as it’s reasonably related to the problem. Here are some specific issues to consider:
In-Store Entry: Because many stores may be closed and most people in the U.S. are subject to some degree of social isolation, it may not be practical or possible to have in-store entries. You may want to cancel the in-store entry portion and keep (or add) an online-only entry component. If entry was only via in-store, you even may want to seriously consider getting rid of this option under the circumstances.
Verification: Many Official Rules impose a strict deadline on returning verification documents and many require notarized signatures. A sponsor may want to consider loosening these restrictions at this time, since mail or “overnight” delivery may be more sporadic and finding a notary may be next to impossible. Strict adherence to these requirements may vary depending on the size and nature of the prize, but perhaps you can be a little more creative to confirm a winner’s identity such as having them send a copy of their driver’s license or having a video chat with them.
Prize trips: As we all know, air travel is currently in a huge state of flux. Plus, many popular destinations are closed. If your sweepstakes is giving away a trip to Wimbledon in 2020, you obviously can’t do this. If you’re giving away a trip to Disney World to be taken within one year, you’re probably still ok. The best advice may be to work with your winners if a flight or destination trip is the prize. Consider extending deadlines if necessary or substituting cash or another substitute if an event has been canceled. A sponsor may be able to rely upon force majeure, forfeiture or non-substitutions language in the rules to avoid awarding a prize, but if the sweepstakes continued to run after the sponsor was aware of potential problems with awarding the prize, it may not be so easy.
Announcements: If you are going to have to modify, suspend or terminate your sweepstakes, after ensuring that you are on solid ground doing so, you need to let the people know. A good rule of thumb would be to let them know in all of the media where you let them know of the promotion in the first place, including online and on social media spelling out the changes with a clear notice.
Now is the time to address all of the things you’ve learned from an unexpected pandemic affecting a sweepstakes. Obviously, for the big picture you’ll need to think through the methods of entry, the prize and whether it can be awarded. But also read your Official Rules with some more scrutiny. Make sure you have a force majeure clause and that you have left yourself options for contingencies that may occur.
Everyone stay healthy and safe.