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Template Terms and Conditions for Free Prize Draws

Free Prize Draw Terms and Conditions

BS.PRIZE.01

These Free Prize Draw Terms and Conditions are designed for use by private companies who wish to run free prize draws for consumers (adults aged 18 or over), for example, for promotional purposes. This document is not designed for charities.

Please note that due to differences in laws regulating prize draws and sweepstakes in Northern Ireland, these Terms and Conditions are not suitable for use there and should be used only in England, Wales, or Scotland.

Regulation under the Gambling Act 2005

Certain types of prize draws and competitions are regulated by the Gambling Act 2005. Free prize draws are not. The prize draws for which this document is designed, therefore, are not regulated by the Gambling Act 2005. Care must be taken, however, if you wish to alter the terms of the template to the extent that payment is required. If payment is required to enter the draw or to collect the prize, it will become a “lottery” and will be subject to the Gambling Act, subject to some exceptions:

Normal expenses incurred by entrants at normal rates (i.e., not premium rates) for postage, telephone, etc., are not classed as a payment to enter. It is also possible to avoid your prize draw from being classified as a lottery if there is a free entry route in addition to the paid entry route. The free entry route must be publicised so that it is likely to come to the attention of anyone wishing to participate in the draw and the system for allocating prizes must not distinguish between the free and paid routes. Following recent legal action brought by the Advertising Standards Authority against a well-known promoter, it is strongly recommended that free and paid entry routes for prize draws are displayed with equal prominence.

The CAP Code and Other Regulations

Sales promotions, including prize draws, are regulated by Section 8 of the UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing. This is known as the CAP Code and can be accessed here . These Terms and Conditions are designed to provide the information required by the CAP Code. Please also note that additional rules apply to prize draws targeted at children. This document is not designed for prize draws aimed at under-18s.

Other rules specific to certain industries or types of media may also apply to a prize draw. One example is prize draws which involve premium rate telephone services. In these cases, promoters must also comply with the Phone-paid Services Authority (PSA) Code and, if applicable, the special conditions set out by the PSA for online competitions. The PSA Code and special conditions can be accessed here .

Depending on the nature of the proposed prize draw, this can be a complex area and great care is required. Professional legal advice should always be sought in the event of any doubt.

The CAP Code and the Terms and Conditions

These Free Prize Draw Terms and Conditions have been drafted to assist in compliance with the CAP Code:

  • Entry restrictions are incorporated (e.g., age restrictions).
  • Instructions on how to enter the prize draw are provided, including applicable conditions and a cap on the number of entries per person (or per household).
  • Starting and closing dates are set out.
  • The “mechanism” of the prize draw is explained, and options are included for different methods of picking winners.
  • Space is provided for a description of the prize or prizes. Detailed descriptions should be given here, including the number of prizes to be given (or a reasonable estimate of the number if it cannot be predetermined). It is also important to explain if prizes are to be shared among multiple winners and if any prize is to be received by winners in instalments.
  • The terms explain how prize winners will be informed of the results of the draw. The CAP Code states that promoters may only withhold prizes if the qualifying criteria are clearly set out in the terms and conditions. In this case, entrants are required to respond to the promoter within a certain period of time, providing their delivery address for their prize. If a prize winner does not respond, the promoter may award the prize to another entrant.
  • Time limits are left for promoters to determine in the template, and must be handled with care. Under the CAP Code, if a prize winner will have to wait for more than 30 days after the closing date of the draw, the date by which the prize will be received must be set out before or at the time of entry. The time limits and dates in these terms and conditions are designed to do that.
  • The template terms allow for prize substitution if events beyond the control of the promoter necessitate it. Under the CAP Code, promoters must avoid causing unnecessary disappointment. The terms and conditions therefore require a substitute prize that is of equal or greater value than the original.
  • The CAP Code requires that promoters publish or otherwise make available information to indicate that a valid award has taken place. Typically, such information consists of the surname and county of “major prizewinners” and, where applicable, their winning entries. These terms and conditions explain that and also allow for prize winners who wish to object, but nevertheless explain that the information must be made available to the Advertising Standards Authority on request. (Note that this document does not address the use of entrants’ details in publicity materials. Consent to do this must be obtained from the individuals concerned.)

Other key provisions in these Terms and Conditions deal with important topics such as the limitation of liability and data protection. Note that the limitation of liability clause is worded to be fair to consumers and does not seek to limit or exclude liability which cannot be limited or excluded by law.

Optional phrases / clauses are enclosed in square brackets. These should be read carefully and selected so as to be compatible with one another. Unused options should be removed from the document.

These Free Prize Draw Terms and Conditions contain the following clauses:

1. Definitions and Interpretation
2. Prize Draw Entry Rules
3. Opening and Closing Date
4. How to Enter the Prize Draw
5. The Prize Draw
6. Limitation of Liability
7. Privacy and Personal Data
8. Law and Jurisdiction

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